Workers want more money than ever to risk taking a new job

Workers are demanding higher wages to accept new job offers, even in a challenging labor market, according to recent data from the Federal Reserve Bank of New York. The reservation wage, which represents the lowest wage a worker would accept for a new job, has reached a record high of $88,387 in July 2026, up over $10,000 from March 2025. This wage increase reflects workers' heightened risk aversion and their reluctance to leave their current positions in the current uncertain job market.

The trend of workers holding out for better pay packages is particularly pronounced among those who already have jobs. During the Great Resignation, when the labor market was tighter following the pandemic, job-hopping was a viable strategy for career advancement and salary growth. However, the current labor market is weaker, with more layoffs and job contractions, making the decision to switch jobs riskier.

AI has also become a significant concern for workers, with mentions of it in company reviews increasing by 240% from May 2025 to May 2026. Workers are wary of how AI may impact their roles and the companies they work for, which adds another layer of complexity to their decision-making process when considering a job change.

Despite the high reservation wage, workers who are actively job hunting report being willing to accept lower pay to secure employment after company layoffs. This discrepancy between the high reservation wage and the lower offer wages suggests that workers are aware of their skills and believe inflation will remain elevated. While workers desire higher pay, they are not always receiving it, as wage growth has been at the lowest levels in five years, and hiring remains weak, with long-term unemployment increasing.

The wage premium for job switching has been rising, as indicated by the offer wage tracked by the New York Federal Reserve, which has been increasing over the past year. Workers fortunate enough to be searching for new positions from their current roles are unlikely to be satisfied with pay cuts. Employers offering lower wages may struggle to attract top talent, as candidates are holding out for better compensation packages.