Raise in pay may require new job
Despite one of the best job markets in decades, workers across the U.S. economy are struggling with a common frustration: What does it take to finally get a decent raise?
It turns out you might have to quit your job.
Americans who leave their employers to take a new job are enjoying pay raises that are one-third larger than raises for workers who stay put – a gap that has reached the widest point since the Great Recession.
At the same time, retail and restaurant workers are receiving more-generous raises than manufacturing workers are.
And America’s CEOs are getting some of the biggest pay gains of all.
At a time when the average annual wage increase for U.S. workers as a whole remains surprisingly modest given the robust job market, those groups of workers are doing better than average.
Others aren’t faring as well. Pay raises for people who have stayed in the same job for the past year, for example, remain relatively stagnant. That trend has confounded some economists. Many had expected that companies would have to pay more to retain employees at a time when workers are harder to find and the unemployment rate, at 3.9 percent, is near a 50-year low.
Nationally, average hourly pay rose 2.7 percent in July from a year earlier, before adjusting for inflation. That is modest by historical standards. The last time unemployment was this low, in the late 1990s, pay raises for Americans as a whole averaged roughly 4 percent.
And once you factor in inflation, average hourly pay has actually declined slightly over the past 12 months.
With midterm elections looming, the Trump administration is pushing back against the notion that paychecks aren’t growing. In a report released Wednesday, the White House’s top economist, Kevin Hassett, asserted that pay is rising if you consider benefits such as health care, an alternative gauge of inflation and the impact of tax cuts.