Worker confidence in the second quarter takes a hit in three of the four metrics.
By Larry Basinait
The Worker Confidence Index (WCI) for the second quarter of 2019 decreased by 5.8 points to 104.8, similar to the level in the second quarter of 2018 (104.3). An even sharper decline of 7.9 points occurred in the second quarter of 2017, suggesting seasonality as a possible cause of the drop.
Three of the four components that comprise the worker confidence index showed lower results in the second quarter of 2019 compared to the first quarter. The job security index was the only index that increased for the quarter, while the likelihood of a promotion, trust in company leadership, and the likelihood of a raise indices all declined. However, compared to the second quarter of 2018, all four of the indices remain slightly higher.
Females reported higher levels of confidence in their job security than males again in the second quarter of 2019, continuing a trend. Women historically report higher levels of job security and have less fear of job loss than males. It’s interesting to note that the fear of job loss among women actually increased 1.2 points in the second quarter of 2019. This is the highest it’s been in two years. The percentage of males who felt that they would lose their job decreased in the second quarter of 2019 to 11.1 percent from 12.9 percent in the prior quarter. This offset concerns from females and drove the overall increase in the job security index.
Worker perceptions about the likelihood of a raise decreased by 9.0 points for the year to 104.4, falling back in line with the estimate in the second quarter of 2018. Both males and females felt less confident about getting a raise, as 33.8 percent of males and 23.6 percent of females anticipated a raise of at least three percent at their next review. While optimism about a raise in the upcoming 12 months has cooled somewhat, BLS data shows that seasonally adjusted median weekly earnings were $911 in the second quarter of 2019, up a solid 3.5 percent from one year ago. Since the first quarter of 2018, wages have increased by just over three percent.
The belief in the likelihood of a promotion also fell in the second quarter to 110.1. The likelihood of promotion index fell 11.1 points from last quarter, the second largest drop since the inception of the study, driven by fewer females feeling a promotion was coming their way, down 2.8 percentage points to 15.9 percent. The Worker Confidence Index has correctly predicted the direction of consumer confidence for the next quarter’s end in 14 of the last 17 quarters. A decrease in the WCI in the prior quarter would suggest a decrease in the Consumer Confidence Index (CCI) at the end of the next quarter. The WCI suggests the average quarterly CCI will decrease at the conclusion of the third quarter of 2019.
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