The inflation rate is currently running at about 5% — more than double what the Fed would like to see — so it’s not unreasonable for many workers to be expecting a little salary bump to help make ends meet.
A recent survey by payroll processor ADP found that most U.S. workers are expecting a raise this year, with the average anticipated increase running between 6% and 7%.
But the Wall Street Journal reported Wednesday that economic uncertainty and the likelihood of a recession are prompting many employers to be more cautious when it comes to compensation.
If you do get a raise, it will probably be closer to 4%, the Journal reported. If so, that would lag the inflation rate and keep many households living paycheck to paycheck.
“We’re seeing a lot more prudence into how those compensation increases are delivered,” the paper quoted one expert as saying.
These are frustrating times for many employees, not least because executive pay seems to keep soaring while layoffs and cutbacks overshadow many offices.
Google parent Alphabet, for example.
CEO Sundar Pichai made nearly $226 million last year, according to a recent corporate filing.
Most of that came from stock awards. The rest reflects Pichai’s $2 million base salary and more than $5 million for a private security detail.
As far as raises go, this was a doozy. In 2021, Pichai’s compensation was closer to $6 million.
Going from $6 million to $226 million is a 3,666% increase.
That’s especially impressive when you consider that Alphabet’s stock fell by 39% last year.
In January, the company said it would cut 12,000 jobs.
If I could make a humble suggestion: How about if rank-and-file wages were linked to the Consumer Price Index?
That is, if inflation goes up, your wages rise by a commensurate amount. If inflation goes down, you return to your base salary.
That, or give all workers stock in their company — you know, like how CEOs are treated.
Or would employers think that’s unfair?