After a tumble in pay for white-collar job openings, wages for new hires in many blue-collar sectors are now falling
5 min
Bosses are quietly trying to reset worker pay levels, saying the era of overpaying for talent is over.
Pay for many white-collar recruits shrank last year , and now wages for new hires in construction, manufacturing, food and other blue-collar sectors appear to be ebbing too, according to an analysis of millions of jobs posted on ZipRecruiter.com .
Job seekers report seeing roles that once offered salaries between $175,000 and $200,000 a year ago now being advertised for tens of thousands of dollars less, a change that has had them rethinking their pay expectations. Companies are also moving job openings to lower-cost cities or offering them as lower-paying contractor roles, recruiters and corporate advisers say.
The push to reset employee salaries reflects a power shift in the cooling hiring market. Employers have more choice of who they can hire, and at what pay level, and are questioning whether they really need star hires when a workhorse will do . Even hourly jobs that were until recently the toughest for employers to fill are being advertised at lower pay than a year ago, as are some professional roles, according to business leaders and recruiters. undefined undefined “A lot of companies are thinking they can get away with paying a cheaper salary because they know us job seekers are desperate,” said Eric Joondeph, 31 years old, who has been looking for a senior customer-experience role for nine months. He has lowered his pay expectations by at least $20,000 a year since he started looking.
Among listings for more than 20,000 different job titles on ZipRecruiter.com this year, sectors including retail, agriculture, transportation and warehousing, manufacturing, and food all registered drops in average posted pay. The biggest was retail, where average wages advertised for new hires is down 55.9%; agriculture is down 24.5% and manufacturing, down 17.3%.
Tom Locke, a McDonald’s franchisee who owns 56 restaurants in Ohio, Pennsylvania and West Virginia, starts hourly workers at $13 an hour, but the signing bonuses and other hiring incentives he offered during the pandemic are gone. He said he is constantly asking his managers if they can reduce hourly wages to $12 an hour.
Labor expenses at Locke’s McDonald’s locations now exceed his food costs—something he said hasn’t happened in his 24 years with the company.
“I want everybody to do well in America, but there’s cost pressures,” he said. “It’s just a constant battle.”
Pay resets continue to ripple through the white-collar world too. Joondeph has been looking for a senior role in customer experience since he was laid off from a customer-experience associate role.
“I’ve seen salaries slowly dropping little by little for roles I’ve been targeting,” he said.
Based in Boise, Idaho, Joondeph said he is struck by the number of jobs he has applied for that now advertise salaries not much higher than $60,000. Many used to advertise with a range between $80,000 and $100,000 in the past six to nine months, he added.
In some cases, companies are looking to attract less experienced, but still coachable, people who can be paid less than industry veterans, corporate advisers say.
Brooke Weddle, a senior partner at McKinsey & Co., said one client recently decided to stop recruiting stars, putting in place a “no more unicorns” hiring strategy, in part, to lower costs. (Unicorns are top performers with specialised skills who can command outsize salaries.)
Other businesses are considering moving jobs overseas, said Weddle, a leader in McKinsey’s group that advises on personnel issues. Instead of hiring data analysts in the U.S., for example, companies want to add people in Mexico and cheaper parts of Europe, like Poland, to save on labor costs.
“Geographic arbitrage is real,” she said.
In the U.S., some Fortune 1000 companies are moving enterprise software jobs from expensive cities such as Chicago and San Francisco to places with a lower cost of living, such as Cincinnati and St. Louis, Mo., said Keith Sims, president of Integrity Resource Management, a recruiting firm based in the Indianapolis area.
Sims, who for 25 years has helped companies recruit professionals who work with software systems like SAP and Oracle , said he hasn’t seen bosses so intent on reining in pay since the recession of 2009.
Salaries for tech jobs working with back-office and core operations business software that paid between $110,000 and $130,000 a year ago now go to less experienced hires for $85,000 to $100,000, he said. Some companies are laying off entire service areas, renaming the division and populating it with new hires at much lower compensation levels.
Overall pay for new hires in white-collar sectors increased this year, after falling in 2023, buoyed by gains in certain corners of the professional world, including law, engineering and healthcare, according to Julia Pollak , ZipRecruiter’s chief economist.
Although some tech roles that require artificial intelligence skills still offer hefty pay, many other tech jobs are advertised at lower salaries than two years ago, according to some Silicon Valley recruiters.
“Most people we interview are seeing lower salaries,” said Jill Hernstat, chief executive of Hernstat & Co., a tech recruiting firm based in the San Francisco Bay Area. “Hiring managers know they are more in control now.”
Other white-collar professions with declining new-hire salaries include finance, down 9.2% in the past year, other professional services, down 2.4% and insurance, down 1.6%, according to Gusto, a payroll and benefits software company with more than 300,000 small and midsize businesses as customers.
Pay adjustments are easing some tensions among colleagues who may have resented how much new hires were making, and the fact that tenured employees’ pay hadn’t kept up, said Tom McMullen , a senior client partner at Korn Ferry , a global organizational consulting firm.
“A lot of leaders wanted this market to cool down because they got themselves into some internal equity messes by paying through the nose for all this hot talent,” he said. “What we’re hearing is, ‘Hey, I don’t have to offer the exorbitant in-hire rates that I was offering.’”
Kate Ball was at Amazon .com for eight years, some of them as a senior recruiter, before being laid off in 2023. External recruiters have since repeatedly called her about a contract role there as a senior recruiter. Ball said the job is virtually the same as the one she had once held, but for up to 65% less pay.
Some of her former co-workers who were also laid off have taken lower-paid contract positions with Amazon: “I don’t know anyone that came back on the same package,” said Ball, 44, who has started her own HR advisory practice, Sparkle & Sass Consulting.
As Ball has applied for roles elsewhere, she has noticed some openings get reposted with lower pay ranges than were advertised weeks or months before. She applied for one job, as an employee-experience manager, went through two interview rounds, then heard nothing. A few weeks later, she saw the same job re-advertised, this time at roughly a third less than the six-figure salary she’d been quoted by the recruiter.
It is understandable, Ball said, that companies are reining in pay when they have a greater pick of job candidates than they did a couple of years ago. Still, some tactics could create ill will for employers when they have to compete more intensely for talent again.
“People will take a job now because it pays them and they’re scared, but that’s not going to last forever,” she said.
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Strong family financial planning can help reduce taxes and support younger generations. From intrafamily loans and asset gifts to inheritance disclaimers, strategic cooperation can create meaningful financial benefits—when families have the trust and structure to make it work.
4 min
Happy is the family whose members—parents, grandparents and grown children—trust each other enough to cooperate on shared goals, especially financial ones. When that is truly the case, Uncle Sam’s tax rules can help as well.
This matters especially now that mortgage rates are above 7%, and many families are looking for ways to help younger members. If the elders have resources and are confident younger ones can cooperate, a family loan could make homeownership possible while providing the elders with a useful income stream.
Other strategies can actually lower taxes, such as when funding 529 plans or Roth IRAs, or when someone inherits a traditional IRA with required withdrawals larger than they will need.
Here are three strategies useful for functional families.
It is perfectly legal for families to lend money to a relative for a down payment or even a private mortgage.
But it is important not to cut corners, says Ryan McKeown, a CPA with Modern Wealth Enhancement in Minnesota. If the loan is for a down payment, be honest with the mortgage provider and have a formal agreement. The lender owes tax on the interest payments received.
If the loan is for a private mortgage, both sides should have legal representation with a formal written agreement, including payment terms. The lender owes tax on the interest, and the borrower often can deduct it if he or she itemizes.
To avoid IRS trouble, the interest rate shouldn’t be lower than the agency’s Applicable Federal Rate at the time of the loan. Currently that is about 5% for loans longer than nine years; about 4.5% for loans three to nine years; and about 4% for loans three years or less. Currently, traditional mortgage rates are generally above 7%.
In addition, the lender could use the $19,000 annual gift-tax exemption (described below) to forgive some or all of the interest or principal annually. If both lenders and borrowers are married, that is up to $76,000 a year. There is no tax for the borrower on such forgiveness, because it is from a gift.
If you’re going this route, McKeown advises against having a fixed plan to forgive the debt. Instead, do it in one-off letters specifying the amount—and keep careful records. Otherwise the IRS might try to treat the loan as a taxable gift.
Powerful tax-saving moves for families often use gift-tax provisions. Under current law, anyone can give anyone else up to $19,000 of assets annually, free of gift tax. That means a married couple with three grandchildren could give them a total of $114,000 in 2026.
The gifts can be cash or other assets, like stock. For noncash gifts, the cost basis—which is the starting point for measuring taxable gain after a sale—“carries over” to the recipient. So if someone buys $1,000 of stock and gives it away when it is worth $5,000, the recipient’s cost basis is $1,000. If the recipient later sells the shares for $8,000, the taxable gain is $7,000.
Here’s an example showing how gifts could save a family taxes. Grandma is a widow of modest means, while her child and spouse have prospered. The couple has two children, and they want to contribute $5,000 to a 529 college-savings plan for each—but they need to sell stock to do it. Their tax rate on the sale would be 18.8%, and they would need to sell about $11,000 of stock.
However, Grandma’s federal tax rate on the stock sale is 0%. If the couple gives $10,000 of shares to Grandma, she could sell them, pay no tax, and fund the grandchildren’s 529 plans. This saves about $1,000 of tax.
These moves are legal, and they could be used in other ways, such as to help a young person fund a Roth IRA.
But trust among family members is essential: Under the law, givers can’t put conditions on a gift. Grandma could use her stock proceeds to take a cruise, but she makes 529 contributions instead.
Mark Sellner, a retired tax attorney and CPA living in Sarasota, Fla., uses this strategy. His children sell stock he gives them and fund 529 plans for his grandchildren.
The family’s tax savings aren’t huge, but he likes other benefits. The sales by his children don’t boost his adjusted gross income, which in turn could raise his Medicare Irmaa premiums or his 3.8% surtax on net investment income.
Sellner doesn’t worry about his children using the funds for another purpose.
“There can’t be any strings attached to gifts. Of course, it is up to us to decide whether to make them in the future,” he says.
Two caveats: The “kiddie tax” applies to most children under age 24, and it is levied at the parents’ rate on investment income above $2,700 in 2026. Consider this before making gifts to a young person.
Investors who give away stock also forgo the step-up, an important provision that exempts assets held at death from capital-gains tax.
Sellner knows he’s losing a step-up, but says, “The children could use a little more now. Why should they wait 20 years to get it?”
A disclaimer is a highly useful strategy in which one heir renounces an inheritance in favor of another heir. Assuming family members cooperate, this can save taxes.
Here’s one example. Dad died and had a large traditional IRA that he left to Mom. She has enough assets and income to cover her expenses, and she lives in a state with a stiff estate tax. The inherited IRA would put her estate over the threshold.
Also surviving are three young-adult children. If Mom disclaims all or part of Dad’s IRA within nine months of his death, that amount could go directly to the children. They will have 10 years to empty the account, and the family as a whole will likely save estate and income taxes.
Disclaimers have many key details, especially regarding beneficiary documents. Although heirs have great freedom in choosing what assets to disclaim, the rules about who gets disclaimed property are rigid. It is best if the original owner names tiers of heirs so that if one disclaims, the next recipient is clear.
