Many Workers Are Enjoying a Summer of Pay Increases
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Here's your money briefing for Wednesday, July 13th. I'm J.R. Whalen for The Wall Street Journal. Career experts say high inflation and the current hot labor market make it an ideal time for workers to ask for a raise, while many companies are beating them to the punch, taking the unusual step of giving up mid-year company-wide salary increases and issuing special bonuses.
They still feel like it's a very tight labor market. It's hard to hire. Employees have options. And that means that workers can press their bosses for more money right now.
Chip Cutter covers management and the workplace for the WSJ. Coming up, we'll talk with him about how long workers will have leverage like this. That's after the break.
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We've told you how many companies are offering perks like gas cards and gift certificates to help employees deal with higher prices. But some companies are going a step further, offering straight-up pay raises, and they're doing it in the middle of their fiscal year. Chip Cutter covers workplace and management issues for the WSJ, and he joins us with more.
How are employers responding to inflation with mid-year pay increases and bonuses?
Hey, Chip, thanks so much for being with us.
Thanks, JR. Thanks for having me.
So, Chip, you've been in touch with a lot of the companies giving out raises and bonuses. What's it like out there? What kinds of conditions are they facing to cause them to make this move?
Well, this remains a really tight labor market, one where many companies say they have to respond in order to keep employees. They have to keep raising their pay to adjust for inflation, to adjust for the fact that many employees continue to have options if they would want to get a job elsewhere. And so you see companies across industries resorting to moves that they haven't typically done in the past, some offering special one-time bonuses. ExxonMobil, for example, gave a U.S. employees a one-time payment in June equivalent to 3% of their salaries. The company T. Rowe Price, for example, had seen its turnover tick up. And so the company responded by sending an email to 85% of its workforce this summer saying that everyone would be getting a 4% raise effective July 1st.
This comes in addition to sort of the usual raises the company gives out following the end of its fiscal year. And so you see moves like that where companies are watching their data, they're noticing turnover tick up, and they're realizing they have to do something differently.
Yeah, and a lot of companies like that often include pay raises and bonuses as they prepare their upcoming annual budget. But now they're doing this mid-year. How unusual is that?
Mid-year pay raises really are pretty rare if you look historically. It's not often the case where companies sort of dip in and do something special like this. There was a survey of about 300 large employers yesterday. conducted by the compensation advisory firm Pearl Meyer. And they found that about a third of employers are now considering or planning mid-year raises.
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