Worker confidence is up, but trust in company leadership is on a steady decline.
By The Editors
The Worker Confidence Index (WCI) for the third quarter of 2017 increased by 2.8 points after significant drop of 7.9 points in the second quarter. WCI now stands at 102.5. Of the four components of the WCI, only likelihood of promotion rose by 3.2 points in the third quarter of 2017, while other components remained virtually the same. Other indicies—job stability, likelihood of raise, and trust in company leadership—measure similarly to the third quarter of 2016.
Workers remain secure about job stability. After a sharp decline in the first quarter of 2017, job security quickly rebounded, and now stands at 104.8, about where it was five quarters ago. Lack of concern about job loss is the most important indicator in estimating worker confidence about current and near-term financial outlook.
Females once again reported higher levels of confidence in job security than males in the third quarter of 2017. In fact, women reported the highest level of job security since the inception of the study. The percentage of males who felt that they would lose their job increased slightly to 11.4 percent from 10.5 percent in the prior quarter. Female concern over job security declined, down 2.1 percentage points from last quarter to 5.9 percent. Respondents over the age of 45 also reported feeling more secure about their job stability. Higher income employees (the $100,000- plus segment) reported having the most job security.
In 2017, trust in company leadership continued to decline steadily for the third consecutive quarter. Corresponding with that decline is a decrease in the belief in the likelihood of a raise of at least 3 percent. Workers tend to not trust management when they learn of positive earnings and then that success doesn’t translate to greater compensation for them. They may feel secure because the company is doing well, but trust isn’t necessarily established if the company’s positive result doesn’t result in increased compensation for employees. While two-thirds (63.8 percent) of the youngest respondents expressed confi dence in their company’s leadership in the third quarter of 2017, trust in leadership declined steadily as age of respondents increased.
More tenured employees (35 and older) have less faith in a raise of at least 3 percent after the next review. As employees get older, more and more feel that what they make today is what they will make tomorrow. Older workers tend to make more and drive more consumer spending.
Worker confidence recovered from the second quarter decline, and now stands higher than it did one year ago. The current price of the Dow Jones Industrial Average at the end of November was 23,754.36. That’s up more than 24 percent from November 2016. As long as the U.S. stays in a bull market, businesses will invest, retirement accounts will grow, and workers will remain confident in their employment situation, even if they don’t perceive company leadership as sharing the wealth.