Want a Big Raise This Year? Employers Say Forget It
We’ve heard the same old story for several years now: Wage growth has stagnated, and employers simply can’t afford or pull enough resources to give employees a salary bump. Of course, that’s not the story for everyone. But the average American worker hasn’t seen their salary increase or their earnings go up in any significant way in a very, very long time. That makes it hard to budget and plan for the future, especially with rising costs for food, housing, and education eating up more of everyone’s paychecks.
But believe it or not, the economy is on sound footing. No, things aren’t great — there are still some very real concerns about the labor force participation rate, and there are signs that another recession is around the corner — but unemployment is down, and there is a sense of certainty that has placated the masses for the time being.
With that in mind, many workers may be hoping to finally get a salary bump or a raise at some point in the near future. After all, when labor is in short supply, employers traditionally raise wages to attract and retain employees. That’s how the system basically works. Unfortunately, it doesn’t look like it’s going to happen anytime soon, at least not according to a new Salary Budget Survey from WorldatWork.
Salary budget growth stalled
Per that survey, employers are expected to award wage increases and salary bumps, but not by much. The average total salary increase budget for 2016 is 3%, and looking to 2017, things don’t pick up any speed. Next year, that number is expected to increase to only 3.1%. What does this mean for the average American worker? You may get a raise this year, but it’s not going to be the significant salary increase you’ve been working hard to earn.
“Organizations are still planning and awarding salary increases but the amount of the increases remains flat and is not changing year over year,” said Kerry Chou, WorldatWork senior practice leader in a press release. “In the U.S. in particular, this may be related to inflation which remains low. The demand for larger salary increases just isn’t there and low unemployment has not been enough to motivate organizations to increase salary budgets.”
The numbers do show that Americans are seeing their pay go up in small amounts to help with adjustments to costs of living, with 89% of workers receiving these types of raises. But these aren’t the type of salary increases or raises that are allowing for increased levels of social mobility. In other words, getting a small pay bump this year isn’t going to allow you to start socking away money for retirement; it may just help you keep up with rising rent or food costs.
And perhaps most surprisingly, a look at international numbers paints a picture of how American workers stack up on a global scale:
How can you get a raise?
This news may be disheartening for many people who were hoping for a raise this year, but it’s important to remember that these are overall trends and in no way speak to any individual’s situation. You could be pulled into the boss’s office tomorrow and given a big pay raise — you just never know. Looking at things from a bird’s-eye view, though, can leave you bummed out.
If you’re not one to sit idly by and let the ebb and flow of economic factors and indicators determine your worth, you can throw your effort behind getting a raise or promotion. It’s not easy, and there’s no roadmap to always making it work, but if you are willing to bust your butt, do the things nobody else is willing to do, and teach yourself a few new tricks while you’re away from the job, you’ll put yourself in a much better position the next time evaluations are levied and pay bumps do come down.
Or, as many people are finding out, you might just want to polish up your resume and see what other jobs are out there. For a lot of people, the easiest way to secure a serious pay increase is to offer up your skills to the highest bidder by looking for another job. Again — not easy. But it may be better than sitting around and waiting for the wage stagnation trend to reverse; something that might not happen at all.