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COMPENSATION: 2017 Estimate Up 3% for Preliminary Budget Projections
Date: October 10, 2016
Major forecasting groups project an increase for nonexempt hourly non-union and non-exempt salaried employees at 3.0%. The forecasts come from WorldatWork, the Conference Board, the Economic Research Institute (ERI), and the Federal Reserve Bank of Atlanta.
This was identical to the actual 2016 salary budget increases measured by both the mean (average) and median (mid value). ERI expects the US unemployment rate to fall only slightly to 4.8% from the current 4.9%.
The FRB Atlanta finds that wages for 2016 increased slightly more than rates reported by the Conference Board. The 3.0% projection increase is across the board for employee categories, though exempt salaried and officers and executives will do a bit better projected at 3.1% on average, beating the CPI.
Why such restrained growth? Low unemployment rates should pressure increases in salaries. So why aren’t wages going up faster? The reason is because the economy is only growing at 2%. This makes it tough to increase prices for goods and services to pay for raises. Further, the reported unemployment rate never measures those underemployed or drop-outs who help keep the lid on.
WorldatWork based its results for the 2016-17 Salary Budget Survey from 5,759 responses provided by the group’s members on anticipated base pay increases for the year ahead.
Article written and published by Security Letter™, September, 2016, New York, NY, Vol XLVI, No 9, Part I