A survey released Monday found that workers have received large raises over the past few years, but amid economic uncertainty they could soon disappear.
Nearly half (49%) of 600 business leaders surveyed this month by ResumeBuilder.com said they would not provide cost-of-living adjustments (COLAs) to employees next year, and 26% said they either would not or might not. . any raises at all. Of those who administer a COLA, 48% will see an increase of 3% or less. Moreover, more than half expect layoffs in 2024.
That could be bad news for workers who are still playing catch-up after more than two years of searing inflation that has devastated their paychecks. While wages have risen sharply for many people over the past two years, helped by labor shortages, these increases have been mostly absorbed by inflation. Only recently, as inflation has cooled, have workers started to regain lost purchasing power, but that looks set to change again. Nearly three-quarters of business leaders said the job market has returned to favoring companies, ResumeBuilder.com reports.
“Cost of living increases are extremely important to the majority of the workforce who may already be underpaid and whose wages have not kept pace with inflation,” said Stacie Haller, chief career advisor at ResumeBuilder.com. “Although the inflation rate has fallen to 3.6%, any increase of less than 4% does not constitute an increase in earning power and wages.”
What is a cost of living adjustment for businesses?
The cost of living adjustment, or COLA, is an adjustment to citizens’ wages to keep pace with inflation. It is intended to help employees maintain the same standard of living from year to year.
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A well-known example is Social Security. Each year, the government provides a COLA to audit beneficiaries’ benefits based on the rate of inflation. In 2024, they will receive a 3.2% increase to take inflation into account.
Restoring COLA is also one of the demands of striking auto workers after being scorched by inflation over the past few years.
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Will wages increase in 2024?
If you’re a standout employee at a company that provides raises, the odds may be almost even.
Overall, 74% of business leaders still say they plan to give raises, but not to everyone, according to ResumeBuilder.com. Half of business leaders say at least 50% of employees at their company will receive a raise, and the majority (82%) of raises will be performance-based. If you’re lucky enough to get a raise, 79% of companies said the raises will be larger than in recent years.
If you’re a mid- or senior-level employee, your chances may be slightly better, as one-third of business leaders believe it’s most important to provide compensation to senior-level, management-level employees, according to ResumeBuilder.com.
Medora Lee is a money, markets and personal finance reporter for USA TODAY. You can contact her at mjlee@usatoday.com and sign up for our free Daily Money newsletter for personal finance advice and business news Monday through Friday.
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