Key facts
- The average lowest wage workers would accept for a new job reached a record $88,387 in July 2026.
- This reservation wage is more than $10,000 higher than in March 2025.
- Workers' increased demands are linked to a weaker labor market and growing concerns about AI's impact.
- Despite high reservation wages, actual wage gains are at a five-year low.
- The wage premium for job switching has increased for those currently employed.
Workers are demanding record-high salaries to switch jobs, with the average reservation wage reaching $88,387 in July 2026, according to the Federal Reserve Bank of New York. This figure represents a significant increase from previous years and reflects a labor market where employees are more risk-averse due to economic uncertainty and growing concerns about the impact of artificial intelligence.
Economists note that the current market is weaker, making job offers harder to come by, which paradoxically drives up the expected compensation for those considering a move. The rise in AI mentions in company reviews, often with negative sentiment, further complicates the decision to switch roles, as workers weigh the potential disruption AI could bring.
However, the high reservation wage does not necessarily translate into reality for all job seekers. Data indicates that workers who have been laid off may be willing to accept pay cuts to secure employment. Meanwhile, overall wage gains are at their lowest levels in five years, and hiring remains weak, with an increase in long-term unemployment.
For those fortunate enough to be searching for a new job while still employed, the rising wage premium for job switching means that an offer falling short on pay may not be sufficient to justify leaving a current role.