The skyrocketing cost of living squeezed workers in 2022, and throngs of local employers responded with financial incentives—namely pay raises, bonuses, and increased mileage reimbursements. It comes at a time when the mounting costs of almost everything is weighing on the average American.
Most of today’s workforce has never dealt with the kind of monthly cost increases the Federal Reserve is now fighting. Prices have risen 7.7 percent over the past year. The last time Americans saw anything like this was in the 1980s.
The C-suite seems to realize workers need more money. In a national survey of 337 companies conducted in May by executive compensation consultancy Pearl Meyer, employers said they had already raised wages 4.8 percent on average this year; a quarter of organizations had paid out increases of 6 percent or more. For more than two decades, total base salaries have risen far more gradually, around 3 percent annually.
Research shows that the push to increase wages is not only decent but makes good business sense. Even with a recession looming and power shifting back to the employer, the country remains in the grips of a labor shortage. Companies need to keep the people they have, and that is driving wage increases, too.
The Pearl Meyer survey found that 44 percent of employers cited “retention concerns” as the primary reason for higher raises this year; 30 percent said “cost of living.”