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In a U.S. Department of Education memo, senior officials detail the errors made by its servicers as tens of millions of borrowers resumed their payments in October.
The companies sent more than 21,000 people “very high” and “potentially incorrect” bills, according to the memo. One borrower was told she owed $108,895.19 for the month.

Secretary of Education Dr. Miguel Cardona answers questions during the daily briefing at the White House Aug. 5, 2021.
Win McNamee | Getty Images

As student loan bills restarted in October for tens of millions of Americans, the companies that service those loans made errors that potentially violate federal and state consumer protection laws.
In a memo quietly published Wednesday night on the U.S. Department of Education’s website, senior officials in the department’s office of Federal Student Aid detail how some of its servicers botched the return to repayment, and possibly put the government at “substantial reputational risk.”

“The restart of repayment has caused pure chaos for nearly 3 million borrowers,” said higher education expert Mark Kantrowitz, who reviewed the memo at CNBC’s request.
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Education Department staff said in the memo that they had identified 78,000 borrowers who received incorrect monthly bills under the Biden Administration’s new Saving on a Valuable Education, or SAVE, plan. That plan, which was touted as the “most affordable repayment plan ever,” was meant to ease the transition back to payments for borrowers. Federal student loan payments had been on pause for over three years until they resumed last month.
Yet one woman who signed up for the SAVE plan got a bill for $355, the memo notes, when she was only supposed to owe $58. Her bill before the pandemic was $130 per month.
More than 21,000 people were billed “very high” and “potentially incorrect” amounts, according to the memo. One borrower was told they owed $108,895.19 for the month. (That was their total balance, but their servicer had erroneously reduced their loan term to two months from 120 months.)

The Education Department pays the companies that service its federal student loans — including Mohela, Nelnet and EdFinancial — more than $1 billion a year to do so.
The memo also details the problems that resulted from Mohela’s failure to send timely billing statements to 2.5 million borrowers this fall, including some 830,000 people becoming delinquent. The department announced last month that it will withhold $7.2 million in payments to Mohela in October for those errors.
Student loan servicers have diminished their call center capacity by reducing their hours and hiring less experienced representatives, Education Department officials wrote. It described many people waiting an hour or more on the phone to reach someone, and half of borrowers failing to get through to anyone at their servicer.

Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers, said the government and insufficient funding was largely to blame for the mess.
“We have long warned these potential issues would arise with the government choosing to not pay for more staff and resources,” Buchanan said. More

The Federal Reserve left interest rates unchanged at the end of its two-day policy meeting.
For consumers, it won’t get any less expensive to carry credit card debt, buy a house, purchase a car or tap into home equity.
Here’s a breakdown of how the Fed’s decision affects your money.

The Federal Reserve left its target federal funds rate unchanged for the second consecutive time Wednesday.
Even so, consumers likely will get no relief from current sky-high borrowing costs.

Altogether, Fed officials have raised rates 11 times in a year and a half, pushing the key interest rate to a target range of 5.25% to 5.5%, the highest level in more than 22 years. 

“Relief for households isn’t likely to come soon, at least not directly in the form of a cut in the fed funds rate,” said Brett House, economics professor at Columbia Business School.
The consensus among economists and central bankers is that interest rates will stay higher for longer, or until inflation moves closer to the central bank’s 2% target rate.

What the federal funds rate means for you

The federal funds rate, which is set by the central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.
To a certain extent, many households have been shielded from the brunt of the Fed’s rate hikes so far, House said. “They locked in fixed-rate mortgages and auto financing before the hiking cycle began, in some cases at record-low rates during the pandemic.”

However, higher rates have a significant impact on anyone tapping a new loan for big-ticket items such as a home or a car, he added, and especially for credit card holders who carry a balance.
Here’s a breakdown of how it works.

Credit card rates are at all-time highs

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rose, the prime rate did as well, and credit card rates followed suit.
Credit card annual percentage rates are now more than 20%, on average — an all-time high. Further, with most people feeling strained by higher prices, more cardholders carry debt from month to month.

“Rising debt is a problem,” said Sung Won Sohn, professor of finance and economics at Loyola Marymount University and chief economist at SS Economics.
“Consumers are using a lot of credit card debt and paying very high interest rates,” Sohn added. “That doesn’t bode well for the long-term economic outlook.”
For those borrowers, “interest rates staying higher for a longer period underscores the urgency to pay down and pay off costly credit card debt,” said Greg McBride, chief financial analyst at Bankrate.com.

Home loans: Deals slow to ‘standstill’

Although 15-year and 30-year mortgage rates are fixed and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power, partly because of inflation and the Fed’s policy moves.
The average rate for a 30-year, fixed-rate mortgage is up to 8%, the highest in 23 years, according to Bankrate.
“Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory,” said Sam Khater, Freddie Mac’s chief economist.

Prospective buyers attend an open house at a home for sale in Larchmont, New York, on Jan. 22, 2023.
Tiffany Hagler-Geard | Bloomberg | Getty Images

Other home loans are more closely tied to the Fed’s actions. Adjustable-rate mortgages and home equity lines of credit, or HELOCs, are pegged to the prime rate. Most ARMs adjust once a year after an initial fixed-rate period. But a HELOC rate adjusts right away. Now, the average rate for a HELOC is near 9%, the highest in over 20 years, according to Bankrate.
Still, Americans are sitting on more than $31.6 trillion worth of home equity, according to Jacob Channel, senior economist at LendingTree. “Owing to that, many homeowners could benefit from tapping into the equity they’ve built with a home equity loan or line of credit.”

Auto loan payments get bigger

Student loans: New borrowers take a hit

Federal student loan rates are also fixed, so most borrowers aren’t immediately affected by the Fed’s moves. But undergraduate students who take out new direct federal student loans are now paying 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.
The government sets the annual rates on those loans once a year, based on the 10-year Treasury.
If the 10-year yield stays near 5%, federal student loan interest rates could increase again when they reset in the spring, costing student borrowers even more in interest.

Savings account holders are earning more

“Borrowers are being squeezed, but the flipside is that savers are benefiting,” McBride said.
While the Fed has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate. The savings account rates at some of the largest retail banks, which were near rock bottom during most of the Covid pandemic, are currently up to 0.46%, on average, according to the Federal Deposit Insurance Corp.
“Average rates have risen significantly in the last year, but they are still very low compared to online rates,” added Ken Tumin, founder and editor of DepositAccounts.com.
Some top-yielding online savings account rates are now paying more than 5%, according to Bankrate, which is the most savers have been able to earn in nearly two decades.
“Savings are now earning more than inflation, and we haven’t been able to say that in a long time,” McBride said.
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Year-end Planning

The IRS has increased the 401(k) plan contribution limits for 2024, allowing employees to defer up to $23,000 into workplace plans, up from $22,500 in 2023.
The agency also boosted contributions for individual retirement accounts to $7,000 for 2024, up from $6,500.

Andresr | E+ | Getty Images

The IRS has announced new 2024 investor contribution limits for 401(k) plans, individual retirement accounts and other retirement accounts.
The employee contribution limit for 401(k) plans is increasing to $23,000 in 2024, up from $22,500 in 2023, and catch-up contributions for savers age 50 and older will remain unchanged at $7,500. The new amounts also apply to 403(b) plans, most 457 plans and Thrift Savings Plans.

More from Year-End Planning

Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

The agency also boosted contribution limits for IRAs, allowing investors to save $7,000 in 2024, up from $6,500 in 2023. Catch-up contributions will remain unchanged at $1,000.
In 2024, more Americans may qualify for Roth IRA contributions, with the adjusted gross income phaseout range rising to between $146,000 and $161,000 for single individuals and heads of households, up from between $138,000 and $153,000 in 2023.

The Roth IRA contribution phaseout for married couples filing together will rise to between $230,000 and $240,000 in 2024, up from between $218,000 and $228,000.
The IRS also increased income ranges to qualify for the retirement savings contributions credit and the ability to deduct pretax IRA deposits with a workplace plan.Don’t miss these stories from CNBC PRO: More

The Education Department says its loan servicers have made numerous mistakes as student loan bills resume.
These errors can be especially painful for borrowers who’ve signed up to have their monthly bills automatically deducted from their bank accounts each month.
Requesting a refund can be frustrating and time-consuming.

Fotostorm | E+ | Getty Images

Morgan Lindsay didn’t mind that student loan bills were resuming in the fall. She’d applied for a new repayment plan over the summer, and her calculated monthly bill came to $0.
But then, on Sept. 11, she found that her servicer, Mohela, or the Missouri Higher Education Loan Authority, had taken $2,074 from her bank account.

“I blamed my husband at first,” said Lindsay, who asked for her last name to be withheld for privacy reasons. “I said, ‘Why did you pay so much to my student loans?'”
When she realized the mistake had been her servicer’s, she panicked.
“I lost sleep over it,” Lindsay said. “That’s our nest egg, and if there was an emergency, it was gone.”
When she called Mohela, she was on the phone for an hour before she got someone on the phone. She learned that the company had billed her as if she were on the Standard Plan, which divides a borrower’s debt evenly over 10 years of payments. Her total student debt balance is over $170,000, and like for many other people, that plan is unaffordable for her.
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But under the income-driven repayment plan she’d signed up for, she didn’t owe anything. Those plans base a borrower’s monthly bill on their discretionary income, and Lindsay works in the public sector.
The customer service representative at Mohela promised her a full refund within seven to nine business days.
Still, she felt on edge.
“They weren’t sending me anything in writing,” she said. “What if I got an overdraft fee? What if I couldn’t pay my mortgage?”
Mohela did not immediately respond to CNBC’s request for comment.

Some borrowers got inaccurate bills topping $10,000

Similar to Lindsay, many student loan borrowers describe a nightmarish experience with the return to repayment.
The Biden administration resumed the bills for some 40 million Americans last month, after they’d been on pause for more than three years. The U.S. Department of Education has already withheld a large payment to Mohela for October for failing to send timely bills to some 2.5 million people — more than 800,000 of those borrowers became delinquent on their loans as a result. A memo obtained by the Washington Post shows that some student loan borrowers have received inaccurate bills for more than $10,000 a month — and some, $100,000.
Such mistakes can be especially painful for borrowers who’ve signed up to have their monthly bills automatically deducted from their account each month. Borrowers get a small discount on their interest rate for doing so, but getting a refund was a trying ordeal for Lindsay.

That’s our nest egg, and if there was an emergency, it was gone.

Morgan Lindsay
student loan borrower

When two weeks passed and she still hadn’t been refunded, she called Mohela back. This time, she was on the phone for nearly three hours.
Finally, she got a supervisor on the phone — but they had bad news for her.
Her first request for a refund had, for some reason, been canceled, and she was told it could take up to 90 days to get her money back.
At that point, she emailed senior leadership at Mohela, including the company’s CEO, Scott Giles.
Not long after, she heard from a customer service representative with the servicer. Her refund request was expedited, and she got her money back in mid-October.
“It still took a month,” Lindsay said.

Request a refund for wrong payments

Borrowers enrolled in autopay should watch their account “like a hawk,” said higher education expert Mark Kantrowitz.
If you’ve been billed for the wrong amount, you should immediately contact your loan servicer, Kantrowitz said.
Borrowers should demand an “immediate refund,” Kantrowitz said. They should also ask their servicer to cover any late fees from bounced checks or an overdraft.
“Put the demands in writing,” Kantrowitz said.

Borrowers probably shouldn’t opt out of autopay given the interest rate discount, he said. It’s more important that they get their servicer to bill them accurately.
If you run into a wall with your servicer, you can file a complaint with the Education Department’s feedback system at Studentaid.gov/feedback.
Problems can also be reported to the Federal Student Aid’s Ombudsman, Kantrowitz said.
Although Lindsay got her money back, she said the debacle will continue to cost her. Even though it leads to a lower interest rate, she’s no longer comfortable being enrolled in automatic payments.
“How can I trust anyone moving forward with access to my checking account?” she said.
Has your student loan servicer automatically charged you an incorrect amount? If you’re willing to talk about your experience for a story, please email annie.nova@nbcuni.com.Don’t miss these stories from CNBC PRO: More

It will be key that job seekers spread out job applications as the labor market softens.
“It’s much more important to apply frequently to freshly posted jobs,” said Julia Pollak, chief economist at ZipRecruiter. 
Job openings changed very little, increasing slightly to 9.6 million in September, up from 9.5 million in August, according to the latest Job Openings and Labor Turnover Summary from the U.S. Department of Labor.

Filadendron | E+ | Getty Images

Applying to multiple job openings can increase your chances of landing a new gig.
However, if you’re thinking of sending out what one economist called a “firehose of applications” all at once and then just waiting for responses, think again.

“The problem is that sometimes people take a college application approach to the job search,” said Julia Pollak, chief economist at ZipRecruiter. 
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Job seekers often make the mistake of blasting out as many as 100 applications and then thinking they’re done with their search, when in fact they are not, Pollak added.
“It’s much more important to apply frequently to freshly posted jobs,” she said.
Indeed, it will be key that job hunters also actively tailor their applications for those newly advertised positions, especially as the labor market continues to soften.

‘Not much has changed’

Job openings changed very little, increasing slightly to 9.6 million in September, up from 9.5 million in August, according to the latest Job Openings and Labor Turnover Summary from the U.S. Department of Labor.
“Not much has changed over the past few months, and the labor market appears to be stabilizing at a level consistent with a sustainable economy,” said Nick Bunker, chief economist at Indeed.com.
The number of quits and hires have plateaued to pre-pandemic levels while the layoff rate remains historically low, he added.
“I think it could bolster the narrative of a soft landing” for the U.S. economy — rather than a recession — said Pollak, as the labor market is cooling through a slowdown in openings and hires instead of increased job losses and layoffs.
“I think that’s exactly what the Fed was hoping to see,” she added.

‘Set a daily goal of a number of applications’

There are more strategic ways to go about the job search and application process instead of applying to jobs on mass, according to experts.
“Applying to about two to three jobs a day is ideal so candidates can focus on tailoring their resumes, including specific keywords and skills that connect to the job posting,” said Gabrielle Davis, a career trends expert at Indeed.
Job seekers should focus on relevant and recent openings. Employers may receive upward of 100 applications per vacancy, and if you only apply to older positions, you reduce the chances of employers seeing your application. 
“It’s important to keep at it,” Pollak said. “Set a daily goal of a number of applications per day.”
Upon applying for their current role, 89% of workers said they had received a response from their eventual employer within a week or less, according to the ZipRecruiter Survey of New Hires, which polled more than 2,000 currently employed adults in the U.S. 
This means companies that are recruiting are moving very quickly when they get a candidate they like and about half respond within 48 hours, Pollak said.

It’s important to keep at it. Set a daily goal of a number of applications per day.

Julia Pollak
chief economist at ZipRecruiter

“We’re seeing a big push towards speed,” she added. “Employers know that if they take too long in this environment with such a low employment rate to respond, it’ll be too late, and they’ve lost a candidate.”
Therefore, if you applied but don’t hear back within a week, move on and continue your search; applications submitted a month ago are often not serving you, she added.
Additionally, you may want to refrain from applying to multiple openings within a company. Stick to applying to positions relevant to your background and skills. Otherwise, it can hurt your overall chances. 
“It looks as though you’re not focused and rather that you’re just indiscriminately applying without regard for which job is the best fit,” Pollak said.

Make sure your resume gets “past the bots” by making sure the format is legible for computers: meaning, no “fancy formatting, fonts or images.”
You may also want to include certain key words from the job description into your resume, but don’t paste the entire job description in your resume. That is now detected and penalized in most systems, Pollak said.
“It needs to be an accurate reflection of you,” she added.Don’t miss these stories from CNBC PRO: More

Series I bonds are now paying 5.27% annual interest through April 2024, up from the 4.3% yearly rate offered since May.
While the new rate is down significantly from the record 9.62% in May 2022, investors can now lock in a fixed rate of 1.3%, which may appeal to long-term investors.
However, short-term investors should compare I bonds to options like certificates of deposit, high-yield savings accounts, Treasury bills and money market funds, experts say.

Eric Audras | PhotoAlto Agency RF Collections | Getty Images

Series I bonds are now paying 5.27% annual interest through April 2024, up from the 4.3% yearly rate offered since May — and experts have tips for short- and long-term investors.
While the new rate is down significantly from the record 9.62% offered in May 2022, investors can now lock in a fixed rate of 1.3%, up from 0.9%, for I bonds purchased from May 1 through Oct. 31.

The new fixed rate is the highest since 2007.
If you’re a long-term investor, “it’s definitely a good time to build up some I bonds,” said Ken Tumin, founder and editor of DepositAccounts.com, which tracks I bonds, among other assets.
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There are two parts to I bond yields — a variable and fixed rate portion — which the U.S. Department of the Treasury adjusts every May and November.
While the variable rate changes every six months based on inflation, the Treasury may also adjust the fixed rate or keep it the same. The fixed rate stays the same after purchase and the variable rate resets every six months starting on your original purchase date. (There’s a historic breakdown of both rates here.)

“The 1.3 percent fixed rate is what you should be focused on,” said certified financial planner Jeremy Keil at Keil Financial Partners in New Berlin, Wisconsin. “It’s the best fixed rate in 15-plus years.”
Experts say the new 1.3% fixed rate makes I bonds an attractive option for long-term investors looking for an inflation-protected place for cash.

The 1.30% fixed rate is what you should be focused on. It’s the best fixed rate in 15-plus years.

Jeremy Keil
Financial advisor at Keil Financial Partners

“After five years, you can redeem [I bonds] without worrying about a penalty,” Tumin said. “At that point, it can become a very good emergency fund.”
You can buy I bonds online through TreasuryDirect. There’s a $10,000 per calendar year limit for individuals, but also a few ways to bypass it. You can, also purchase an extra $5,000 in paper I bonds with your federal tax refund.

Better options for short-term cash

While I bonds may appeal to long-term investors, experts say there are better options for short-term cash.
One of the downsides of I bonds is you can’t access the money for at least one year. You’ll also trigger a three-month interest penalty by redeeming I bonds within five years, which cuts into your overall return.

If you need the money in a year, “you’re probably better off with a top online certificate of deposit,” said Tumin. The top 1% average for one-year CDs is nearly 5.75%, as of Nov. 1, according to DepositAccounts.
Of course, you can’t directly compare I bonds to a one-year CD because I bond rates change every six months, he said. 
More flexible options may include high-yield online savings accounts, Treasury bills, or money market funds. However, those rates may eventually decline if the Federal Reserve starts cutting interest rates. More

Applicants for Social Security disability benefits face long wait times amid a record backlog of applications.
Experts and lawmakers say more can be done to expedite the process.

Richard Stephen | Istock | Getty Images

If you’ve applied for Social Security disability benefits and are still waiting for an answer, you’re not alone.
“For the first time in history, more than 1 million people are waiting on the Social Security Administration to process their initial disability claim,” said Rep. Drew Ferguson, R-Ga., chair of the House Ways and Means Social Security subcommittee, at a hearing last week.

It currently takes 220 days for claims to be decided, on average, which is more than 100 days longer than it did in 2019, Ferguson said. That is also more than 150 days longer than the Social Security Administration’s standard for minimum level of performance, he said.
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“The real-world consequences for these individuals who are unable to work and wait for their disability decision is devastating,” Ferguson said.

‘He died from the conditions that he applied with’

Experts who testified at the hearing said they have seen the effect of the growing wait times firsthand.
One Social Security disability applicant finally had a hearing scheduled for this month but did not live until the scheduled date, according to David Camp, interim CEO at the National Organization of Social Security Claimants’ Representatives.

That came after his claim for Social Security disability benefits had been denied initially and again at reconsideration, a process where initial decisions may be appealed.
“He died from the conditions that he applied with, that went untreated,” Camp said.
While the patient sought help with 825 days left to live, Social Security wasted more than 500 days with its delays.
“He could not live long enough to outlast Social Security’s capacity to delay,” Camp said.

Moreover, 90% of the reconsideration findings were identical to the initial conclusions, he noted.
From 2010 to 2022, claims for Social Security disability benefits declined by 37%, while claims for Supplemental Security Income, or SSI, fell by 49%, according to Camp. Yet wait times have increased.
“The problem is Social Security’s policies,” Camp said.
Linda Kerr-Davis, acting assistant deputy commissioner of operations at the Social Security Administration, testified at the hearing and acknowledged that the average seven-month wait time for a decision is a problem.
“This is simply not acceptable to you or to us,” Kerr-Davis said.

The steps we have taken are just beginning to show positive results.

Linda Kerr-Davis
acting assistant deputy commissioner of operations at the Social Security Administration

The agency has been taking steps to address the issue within the constraints of its budget, she said, by redirecting experienced personnel, hiring new full-time professionals and working on improvements to processes and policies.
“The steps we have taken are just beginning to show positive results,” Kerr-Davis said.
Experts and lawmakers who testified at the hearing raised more suggestions. These included:

1. Eliminate the reconsideration process

The Social Security disability application may involve an initial application followed by another step called reconsideration, if that first attempt to receive benefits is rejected.
If an applicant does not agree with the decision made during reconsideration, they may then meet with an administrative law judge.
Meeting with a judge is often a more thorough process and typically results in more approvals for benefits, experts said. On the other hand, reconsideration often reaffirms the findings of an initial decision and often adds extra time to process a disability case.
Consequently, experts questioned whether the reconsideration step was a necessary part of the process. Eliminating it altogether may reduce the application process time for individuals who urgently need financial support.

The Social Security Administration has tested eliminating the reconsideration stage, though it has not shared the results, according to Camp.
“If there is a data-driven reason for reconsideration, show us,” Camp said.
Jennifer Burdick, co-chair of the Consortium for Citizens with Disabilities Social Security Task Force, also questioned the need for the practice, which is “largely seen as a rubber stamp,” she said.
Eliminating that phase of the process could free disability determination services staff to work on initial disability claims and reduce backlog, she said.

2. Increase funding for Social Security Administration

Congressional Republicans have proposed a 30% federal budget cut, which would be “completely devastating” to the Social Security Administration, said Kerr-Davis.
Office hours for the agency’s field offices would be shortened, while disability benefit applicants would see wait times increase by at least two months, she added.

Aleksandr Zubkov | Moment | Getty Images

Even level funding from fiscal year 2023 into 2024 would be detrimental to the agency, Kerr-Davis said, as it would not be enough money to build the disability determination services workforce or maintain it.
“There just needs to be more bodies to work these claims,” Burdick said. “This won’t happen unless Congress provides SSA with meaningful sustained funding consistent with the President’s 2024 budget request.”

3. Ensure Social Security uses current resources wisely

While the Social Security Administration is unable to keep up with its current disability claims, it is spending hundreds of millions of dollars on outreach efforts to increase claims, Ferguson noted.
“It feels like those dollars should be going to address the issue that is at hand,” Ferguson said.
In the past 12 years, the agency has invested more than $300 million to obtain up-to-date occupational data that can be used to determine whether a claimant can work in today’s economy.
Yet the Social Security Administration continues to rely on occupational data that is more than 30 years out of date, he noted.
“The SSA is making it harder for claimants and making more work for itself,” Ferguson said. More

Compensation for union workers in the U.S. is up 11.5% since the first quarter of 2020, compared with 14.6% for nonunion workers.
The rise in pay growth for unionized employees this year stems in part from significant labor action.
Still, many unionized workers haven’t negotiated a new contract since the Covid-19 pandemic began.

United Auto Workers members and supporters rally at the Stellantis North America headquarters in Auburn Hills, Michigan, on Sept. 20, 2023.
Bill Pugliano | Getty Images News | Getty Images

While predictions across the board about employee pay are forecasting slower wage growth next year, there’s a notable exception: union workers, especially those in service and manufacturing roles.
They have a long way to go. Compensation for union workers is up just 11% since the first quarter of 2020, compared with 14.6% for nonunion workers, according to Bureau of Labor Statistics data from the second quarter of 2023.

However, wages for union workers grew 4.6% alone in the second quarter of 2023, narrowing the gap with employees who do not belong to unions. The rise in pay growth for unionized employees this year stems, in part, from significant labor action, including a string of labor deals resulting in higher pay.
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The latest data does not reflect recent deals between the United Auto Workers and Ford Motor Company, General Motors and Stellantis, where some employees could receive 25% wage increases. At Ford and Stellantis, employees could see their top wage boosted to more than $40 an hour, and starting wages could jump 68%, to $28 an hour, the UAW said.
While those pay jumps seem significant, collective bargaining agreements are often locked in for several years due to contracting periods and restrictions for how workers can negotiate. Many unionized workers, for example, haven’t negotiated a new contract since the Covid-19 pandemic began.
“Unionized workers couldn’t see the same scale of wage increases over the past few years that non-unionized workers did,” said Aaron Terrazas, Glassdoor’s chief economist. “To some degree, they’re now catching up.”

In other words, it is a particularly prudent time for unionized workers to organize as they enter new contracting periods, experts day.
Cumulative wage growth is still faster for nonunionized workers than for unionized workers, but the gap is narrowing, said Julia Pollak, chief economist at ZipRecruiter.
Through Oct. 9 this year, approximately 453,000 workers have participated across a total of 312 strikes, significantly higher than the 180 strikes involving 43,700 workers during the same period two years ago.
The data is compiled by Johnnie Kallas, a Ph.D. candidate at Cornell University’s School of Industrial and Labor Relations, and the project director of the ILR Labor Action Tracker.

Union jobs can be less vulnerable, though underpaid

In general, union worker wages are less vulnerable to booms and busts in the labor market compared to nonunionized workers, Terrazas said.
“The end result is that the strikes seem like they’re kind of picking up while wages are kind of winding down,” Indeed economist Cory Stahle explained.
On the opposite end, LaCinda Glover, a senior principal consultant at Mercer, said she did not expect to see large upward swings in compensation in tech and health care, both of which are fighting layoff or financial pressures from increased spending during the pandemic.
“They have invested so much in compensation over the last few years that it’s really not sustainable,” she said.Don’t miss these CNBC PRO stories: More