After a pay boom, raises are shrinking
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The era of hefty pay increases is over, and companies are already making plans to trim raises again next year.
The shrinking raises are the latest sign—alongside last week’s lackluster jobs report—that workers have lost much of the leverage they’ve had with bosses in the past few years. With hiring now slowing sharply, employers are controlling payroll costs by cutting or freezing bonuses, doling out fewer and smaller merit increases, business leaders and compensation consultants say.
With hiring now slowing sharply, employers are controlling payroll costs by cutting or freezing bonuses, doling out fewer and smaller merit increases. (Getty Images/Photo illustration/FOX News Digital / Fox News)
Some companies are also trying to fill roles as they open in lower-cost cities, paying smaller salaries than what the previous person was making.
Meanwhile, fewer workers are getting pay bumps from switching jobs than they did late last year, new data show.
AXIOS ELIMINATING ROUGHLY 50 POSITIONS BECAUSE OF ‘TECTONIC SHIFTS IN THE MEDIA’ INDUSTRY
Among 1,900 U.S. companies polled in the second quarter, nearly half said they had downsized their budgets for salary increases this year. That has lowered the median raise to 4.1% this year from 4.5% in 2023. They plan to spend even less next year, projecting a median raise of 3.9% in 2025, according to employer-advisory firm WTW, which conducted the survey.
Ellen Teeter, 23 years old, said she’d hoped for more than the 1.5% raise she received this year.
«I was underwhelmed,» said the bank operations analyst in Charlotte, N.C.
When she joined her
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