Employers expect to hand out 3% pay raises this year


CLARKONOMICS: We’ve been hearing more and more news about how the economy is doing better, but the real evidence of that has been largely absent in our daily lives. Until now!

A new employer survey I read about in USA Today shows the average pay increase this year will be near 3% — the highest since the Great Recession began. That’s still below the pre-recession average, but it’s a step in the right direction compared to furloughs, wage freezes and outright unemployment.

The economy is not galloping forward, it’s more like it’s limping forward. Still, at least it is forward and not backward!

Meanwhile, the survey cited in USA Today shows that more than half of the companies polled said they’re having difficulty attracting critical-skill employees. The fact that the jobs are even there is progress.

As far as retaining employees, 1 in 4 to 1 in 3 employers (depending on how the question is asked) say they’re scared they may lose good people to the competition this year. That’s yet another sign that the situation on the employment front is improving. Of course, it’s not “happy days are here again.” This is still a difficult cycle. But it’s not nearly as rotten as it has been.  

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