Soaring Salaries
Nearly half of all workers got a raise in the past year or switched jobs for better pay, with those who have secondary degrees and make more than $75,000 annually being the most likely to get a bump, according to a Bankrate survey.
Workers who changed jobs in September saw their wages increase a record 6.6% since last year, according to payroll processor ADP, double the wage growth seen by the overall U.S. workforce in the third quarter.
“Base wages are moving up very rapidly,” said Scott Hamilton, who runs the compensation and human resources practice at Gallagher, a consulting and insurance firm.
The company ran a survey earlier this year showing pay would increase a median 3% in 2022, though he says that’s already a conservative estimate now. “The cost of labor and the scarcity of labor have come together to create a perfect storm,” he said.
Average hourly earnings rose 4.9% in October from the prior year, higher than the pre-pandemic rate. But the pay boost was still not enough to keep up with inflation running at 6.2% last month.
With the U.S. entering the tightest labor market conditions since the 1950s, wage pressures will take over as the dominant driver of price increases in the second half of next year, Aneta Markowska, chief financial economist at Jefferies Group LLC, wrote in a report this week.
Not everyone will get a big bump. Many might have to settle for a 2% to 3% pay increase next year, according to Gartner’s head of human-resources research Brian Kropp, as those 15% to 20% pay-boost counteroffers their peers receive will eat up a lot of the compensation budget.
“In this environment, those that are getting ahead are either changing jobs or asking their employer for a counteroffer—and usually getting it,” he said.
This article was provided by Bloomberg News.