Many Workers Set to Get Sizable Raises Next Year
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What is the main topic discussed in this episode?
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Here's your money briefing for Wednesday, December 8th.
What do recent company surveys reveal about planned pay raises for next year?
I'm J.R. Whelan for The Wall Street Journal. We've talked a lot in the show about the tight labor market and how companies have been competing for workers over the past year by, among other things, offering higher wages. But next year, it's looking like pay could rise even faster.
Why are U.S. employers budgeting the largest raises since 2008?
Everybody from sort of the lower paid workers to the higher paid workers to those kind of in the midpoint, all those people should see salary increases next year.
But with inflation running higher and higher, how much will those fatter paychecks help Americans make ends meet? We'll ask our economics reporter David Harrison about that after the break.
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Which worker groups are most likely to see salary increases across wage ranges?
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There's a new survey of companies from throughout the business world, and the results indicate that many companies are planning some pretty substantial raises for employees next year. So who's likely to benefit the most from this? WSJ economics reporter David Harrison has been running the numbers, and he joins us with the details. David, thank you so much for being with us.
Sure thing. so david this new report from the think tank the conference group it shows that companies plan to set aside an average of 3.9 percent of their total payroll for raises next year that's the most since 2008. why are they doing this they're doing it because um frankly they're just uh they're struggling to find enough labor their employees say there's a really tight labor shortage out there and um some of the government data uh suggests you know bears that out um i think in september there were about 2.8 million more job openings than there were unemployed workers. So that's, you know, when you have more job openings than workers, clearly you're going to have a shortage of workers, and as a result, you're going to see higher wages.
So which groups of employees will benefit from this?
I think it should be pretty much across the board. One of the conclusions of the survey that I thought was quite interesting is that companies are raising their entire wage ranges. So that means that everybody from the lower paid workers to the higher paid workers to those kind of in the midpoint All those people should see salary increases next year because the companies basically have said that they're planning on moving up those ranges essentially one step up. So everybody gets bumped up by a certain percentage. So that suggests that this should be really kind of an across-the-board wage increase.
Okay, but how about new employees at a company? How are they likely to fit into this wages equation?
How will new hires and younger employees be affected by pay bumps?
Usually in these kinds of situations, new employees and younger employees tend to be the first to get these wage bumps because if you're a company, you have your existing workforce making whatever they make, and then you bring on new people. In a tight labor market, you're going to pay those new people more. So new employees are the ones that really should benefit first from this.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:38
2
What do recent company surveys reveal about planned pay raises for next year?
0:38–0:52
3
Why are U.S. employers budgeting the largest raises since 2008?
0:52–1:37
4
Which worker groups are most likely to see salary increases across wage ranges?
1:37–3:23
5
How will new hires and younger employees be affected by pay bumps?
3:23–4:08
6
Who ultimately pays for higher wages and could prices rise as a result?
4:08–5:38
7
Are wage increases outpacing inflation and who actually comes out ahead?
5:38–6:28
8
How long might elevated wages and inflation persist according to economists?
6:28–7:07
Speakers
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