Over the last couple of years, the labor market has been steadfastly strong. The Federal Reserve hoped the wage pressure would ease a bit and get unemployment back to a healthy level. In May, the nationwide unemployment rate was at 3.7%.

The Federal Reserve has been attempting to "cool off" the economy by raising interest rates and announced last month that more interest rate hikes are coming. The aim is to decrease demand for goods and services, potentially slowing the economy or creating a forced recession.

What effects does this have on employers?

While the low unemployment rate can be viewed as a good thing, and it is for workers, it certainly can be problematic for employers. With high wage pressure and inflation, the labor market is very tight, and workers are demanding more now than ever.

If you are hiring or recruiting workers right now, you will see that workers will be looking for pay increases, potentially creating another set of pay issues within your organization.