Overall worker confidence declines amid market uncertainty.
By Larry Basinait
The Worker Confidence Index (WCI) for the fourthÂ quarter of 2018 decreased by 0.3 points. It now stands atÂ 107.1, up by 2.6 points on a year-over-year basis from theÂ fourth quarter of 2017. The four indices that compriseÂ the worker confidence index reported mixed resultsÂ in the fourth quarter. The job security and likelihoodÂ of raise indices both increased for the quarter, whileÂ the likelihood of a promotion and trust in companyÂ leadership both declined. For the year, three of theÂ four indices were higher, with only trust in companyÂ leadership in decline.
Workers continue to remain very secure about jobÂ stability. In the fourth quarter of 2018, the job securityÂ index rose over 1 point to an all-time high of 105.2.Â Concern about job loss is the most important indicatorÂ in estimating worker confidence about their current andÂ near-term financial outlook.
Females reported increasingly higher levels ofÂ confidence in their job security than males again in theÂ fourth quarter of 2018, continuing a trend. WomenÂ historically report higher levels of job security (less fearÂ of job loss) than males. The percentage of males whoÂ felt that they would lose their job continued to decreaseÂ in the fourth quarter of 2018 to 10.3 percent from 10.5Â percent in the prior quarter, which was also the fourthÂ consecutive quarter of lower concern about job loss.
Worker perceptions about the likelihood of a raiseÂ increased by 1.1 percentage points for the year. BothÂ males and females continued to feel more confidentÂ about getting a raise, as 35.4 percent of males andÂ 23.6 percent of females anticipated a raise of at leastÂ 3 percent at their next review. In terms of age, studyÂ findings again show in the fourth quarter of 2018 thatÂ as employees get older, more and more feel that whatÂ they make today is what they will make tomorrow.
The belief in the likelihood of a promotion fell in theÂ fourth quarter, but is still up 5.3 points year-over-year.Â The likelihood of promotion index declined 1 point fromÂ last quarter, with males feeling a promotion is moreÂ likely than females. Respondents with annual incomesÂ between $75,000 and $100,000 felt the most optimisticÂ about the likelihood of promotion, with over one-quarterÂ (25.8 percent) believing a promotion was likely.
Trust in company leadership dropped in the fourthÂ quarter of 2018, and now stands at 103.3. The declineÂ in trust as measured by the WCI took place in NovemberÂ and December of 2018, amidst dramatic stock marketÂ declines. 2018 was a bad year for stocks, suffering fromÂ extreme volatility. December was a particularly dreadfulÂ month: The S&P 500 was down 9 percent and the DowÂ was down 8.7 percentâthe worst December since 1931.Â In one seven-day stretch, the Dow fell by 350 points orÂ more six times according to CNN. For the year, the S&PÂ 500 fell 6.2 percent, the Dow dropped 5.6 percent, andÂ the Nasdaq Composite shed 3.9 percent, marking theÂ worst annual performance for all three since 2008.
This decline had to have a negative impact in workerÂ confidence, particularly in the fourth quarter of 2018.Â But this decrease experienced at the end of 2018 mayÂ be short term, and early returns in 2019 support that.Â There was no underlying economic factor in the declineÂ last year, though political unrest and changing U.S.Â Congress may have led to uncertainty, which always hasÂ a negative impact on the stock market.