A defining characteristic of the American job force is the churn of job-hopping: young workers use early positions as stepping stones to a better fit, greater opportunities, and higher pay. However, the post-recession economy shows that the churn may be broken – and lifetime earning potential could be at stake.
Increasing tenure among all age groups in the labor force illustrates a tension in the reduction of the unemployment rate. Fewer people are jobless and layoffs have leveled off to pre-recession levels, but the number of people voluntarily leaving their positions for a new job was down to 2.5 million as of May labor reports. Many young workers report being in the same position for three years or more, despite the potential reduction in long-term earning potential caused by staying put.
Low churn also creates an unfortunate increase in the median wage gap in the short term. Workers aged 25-34 can expect to earn an average of eight percent less than the overall median wage, up from five percent ten years ago. As has been illustrated in prior recession periods, it can be impossible to fully close that gap.
Promising anecdotal evidence suggests that some young workers have been able to restart the churn and begin catching up. However, even those workers may still opt for longer tenures at one position rather than risking the bottom falling out again.
Young workers looking to boost their resumes or escape from an unfulfilling job may take a leap in a different direction: entrepreneurship. Starting a small business can allow workers of all ages to develop their skills and pursue their passions, and small businesses have proven critical to sustained economic growth.
Whether you are seeking job-hopping talent or need startup funds to open your own business, invoice factoring with Factor Finders can narrow the cash flow gap. Learn more about the benefits of factoring your invoices and request a free online quote for invoice factoring today.