Higher living costs spell end to ‘great resignation’ with wage growth set to slow

The rising cost of living is likely to put more people off changing jobs this year, leading to slower wage growth.

After last year’s “great resignation”, when the number of people changing jobs surged due to a tight labour market, job moves are likely to fall back to pre-pandemic averages this year, according to Gabriella Dickens at Pantheon Macroeconomics.

Some 3.2% of workers changed jobs in the third quarter of 2021, the highest since records began in 2001, the Daily Telegraph reported.

Switching jobs is a key driver of wage growth, as workers are more likely to move into higher-paid roles.

“There’s going to be a big hit to real disposable income this year,” said Dickens. “There’s the increase in the National Insurance contributions in April alongside the freezing of the income tax thresholds. All those things combined are going to weigh on consumer confidence and keep that fairly low.”

Story by ProactiveInvestors