Good news and bad news for those who kept their jobs

Many Americans who've kept their jobs during the pandemic have had their salaries slashed. Plus, many new hires are coming in at lower salaries than usual.

Texas economist Dr. Ray Perryman says this is bad news because it may make recovery take a lot longer.

"If those salaries remain lower obviously it's going to impact the recovery because it would limit people's discretionary spending and what they could do once they covered the basic necessities."

Dr. Perryman says spending on non-necessities is a big part of the economy.

"It would impact things like going out to eat as opposed to cooking at home; things of that nature would be impacted because it's those last discretionary dollars that drive a lot of economic activity in our country."

Dr. Perryman says law firms are hiring lawyers who've just graduated at lower rates than the market would typically bear.

"The expectation is that a lot of those salaries would be raised soon because the market sets a certain price for things and the only thing that's changed right now is this unique situation that hopefully doesn't stay with us forever and once that's over things go back to the way they were."

Dr. Perryman says if workers can only afford necessities they won't pay for things like entertainment and recovery depends on discretionary spending.

Sponsored Content

Sponsored Content