Morning Brew: Employee recruiting, retention affected by inflation

UC economist says workers are prioritizing flexibility

A host of factors, namely the war in Ukraine and recurring supply chain shortages, have contributed to inflation reaching a 40-year high in the United States.

Per the Bureau of Labor Statistics (BLS), the Consumer Price Index climbed 7.9% in February, with the price of food, fuel and shelter accounting for the largest share of the increase in average prices paid for goods and services. According to the BLS’s latest jobs report, inflation is outpacing wages by around 3%.


Michael Jones, PhD, associate professor-educator of economics at the University of Cincinnati Carl H. Lindner College of Business.

“There is a gap [in] inflation right now,” Michael Jones, PhD, associate professor-educator of economics at the University of Cincinnati Carl H. Lindner College of Business, told Morning Brew. “It’s at just under 8%. And then wages are around 5%. So, [a] pretty big gap.”

Companies have attempted to combat inflation by increasing pay, but inflation is putting a dent into the effectiveness of those increases. And with gas prices remaining high, permitting employees to work from home could be a more enticing recruitment tool than wage increases.

“Workers are prioritizing [remote work], even over wages, because they have some flexibility,” Jones said. “They can work in Ohio, for example, while maybe enjoying that New York salary or California salary. So what you’re seeing is that companies are competing on other benefits and packages.”

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