U.S. workers raise pay demands for job switches as labor market risks grow

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U.S. workers raise pay demands

Highlights

The New York Fed reports the average reservation wage for job switchers hits a series high of $88,387 in July 2026, up sharply from March 2025.
Glassdoor user reviews referencing AI rise 240% from May 2025 to May 2026, with sentiment turning more negative as labor uncertainty builds.
Despite five-year lows in overall wage gains and weak hiring, offer wages and the wage premium for job switchers are both rising, according to New York Fed and ZipRecruiter data.

Reservation wage climbs amid weaker hiring

As reported by Business Insider, citing the Federal Reserve Bank of New York, the average lowest wage respondents say they would accept for a new job reaches a series high in July 2026. The figure stands at $88,387, reflecting a sharp increase from March 2025 and pointing to growing reluctance among employed workers to switch roles without a stronger financial incentive.

The rise comes despite signs of weakness in the labor market. Chris Martin, senior economist at Glassdoor, says it is harder to secure an offer in the current environment, which raises the level of pay workers expect from a new role. He says the calculation is shaped by the higher perceived cost of leaving an existing position when layoffs and slower hiring make job moves riskier.

That dynamic differs from the post-pandemic period, when job-hopping is a more reliable path to faster wage growth. In the current market, workers who already have jobs appear more focused on protecting stability, and a higher reservation wage suggests they are demanding compensation for taking on that risk.

AI concerns add to caution over switching jobs

Employers' use of AI is also becoming a bigger factor in how workers assess job changes. Martin says uncertainty over how AI may reshape roles and employers is influencing labor market expectations, making some workers more inclined to stay put rather than move into a position that could be disrupted.

Glassdoor analysis by Martin finds mentions of AI in user reviews rise by 240% from May 2025 to May 2026, with those references becoming increasingly negative. That indicates workers are paying closer attention not only to salary, but also to whether a prospective employer and role can withstand technology-driven change.

Even so, economists say workers may not always secure the higher pay they want. Heather Long, chief economist at Navy Federal Credit Union, says wage gains are at their lowest levels in five years, hiring is weak, and long-term unemployment is increasing. Still, offer wages tracked by the New York Federal Reserve have been rising over the past year, and ZipRecruiter economist Nicole Bachaud says the wage premium for switching jobs is also increasing, especially for candidates searching while still employed.

In our earlier article on the split among major U.S. labor unions over AI data center moratoriums, we examined how different groups weigh the promise of new construction jobs against concerns about AI’s broader impact on workers and communities. We also noted that local pushback is growing in parts of the U.S., even as federal policy remains supportive of rapid AI infrastructure buildout.

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