STEVE MARTIN HAD a joke on “how to become a millionaire” during his 1970s stand-up routine. “First,” he would say with a mock-serious glare at the audience, “get a million dollars.”
There are piles of books written about how to invest your money. Far fewer explain how to make money in the first place. To balance the scales, I’ll offer this suggestion: If you’re still working, this would be a great time to interview for a new job. You might be surprised at how much money employers are offering.
I made three moves in six years when I was a cub reporter in the 1980s. I went from $6,700 a year to $30,000. I know, that’s not exactly a king’s ransom, but that’s why I changed jobs so often. I could have advanced, step by step, at any one place. Not every industry works this way, but there’s a tradition in journalism of working your way up from the boonies before settling into a “forever” job in the big city. But instead, I took the elevator up—in pay and responsibilities.
This is one of those rare times where there seem to be job opportunities in every corner of the economy. There’s barely more than one unemployed worker for every two job openings. Job vacancies, as a percent of all positions open and filled, were close to a 20-year high at 6.2% in August, while the unemployment rate was at a 50-year low of 3.5% in September, according to the Bureau of Labor Statistics.
Just as with Springsteen tickets, labor costs can jump unexpectedly high when demand outstrips supply. The typical job changer was rewarded with 9.7% higher pay—after accounting for inflation—according to a 2022 study by the Pew Research Center. By contrast, workers who stayed put saw their pay shrink by 1.7% in real terms over the same period, April 2021 to March 2022.
These days, hiring managers must fling cash—plus promises of remote work—at potential hires in a do-or-die competition for labor. Many restaurants and stores have closed their doors because they can’t hire enough workers.
And the labor shortage isn’t just in retail and restaurants. This August, there were almost 1.9 million open positions in professional and business services, 1.9 million in education and health services, and 347,000 in finance and insurance, says the Bureau of Labor Statistics. These are the sorts of jobs that could pay a mortgage.
I even saw ads for newspaper reporters this summer—the white rhino of job openings. One was to work the cop beat on weekend nights in Lewiston, Maine. I didn’t apply. A few weeks of that could give me PTSD, though also great stories to tell at cocktail parties.
Like peak housing, no one can say how long peak labor might last. Perhaps not long if the Federal Reserve gets its way and succeeds in driving up unemployment next year. I know the Fed is supposed to take away the punchbowl when the party gets going, but putting people out of work seems cold. I don’t wish Jerome Powell luck with it.
Of course, switching jobs is a big decision and there are real risks. The No. 1 risk is that you won’t like the new place. There’s also the risk that, if the economy tips into a recession, the last hired will be the first fired. On top of that, you’ll lose all your work buddies at the current job, and start as the new kid somewhere else. Maybe it’s no wonder that many workers who have good jobs with generous benefits prefer to stay put.
Still, if you’re just starting out—or don’t like your current job—this might be the time to test the waters. A higher rate of pay tends to persist, year after year, throughout a career. It might not make you a millionaire, but maybe you could afford Springsteen tickets. Here’s hoping.
Greg Spears is HumbleDollar’s deputy editor. Earlier in his career, he worked as a reporter for the Knight Ridder Washington Bureau and Kiplinger’s Personal Finance magazine. After leaving journalism, Greg spent 23 years as a senior editor at Vanguard Group on the 401(k) side, where he implored people to save more for retirement. He currently teaches behavioral economics at St. Joseph’s University in Philadelphia as an adjunct professor. The subject helps shed light on why so many Americans save less than they might. Greg is also a Certified Financial Planner certificate holder. Check out his earlier articles.