NATIONAL NEWS:
November 5th, 2008
Experts Forecast Reduction Of Average 2009 Pay Raise To 3 Percent
AHN Staff
Dallas, TX (AHN0 - Next year may not be the best time for U.S. workers to ask for a pay raise from their employers. With the economic slowdown expected to last until 2009 or beyond, wage adjustments are projected to also be on a slow mode, prompting experts to forecast a reduction of average pay hikes from previous estimates of 3.5 to 4 percent to just 3 percent.
The first figures were the first forecast of the Hay Group, a human resource consulting firm in Dallas. Recently the group made an online survey covering 248 companies. About 31 percent were thinking of reducing their salary increases in 2009, while some were considering freezing wages temporarily, said Craig Rowley, vice president of Hay Group.
A separate poll made by Hewitt Associates in October discovered 42 percent of firms surveyed plan to revise raises and bonuses for 2008 and 2009. Hewitt's prediction is close to Hay's when it comes to average salary hike for next year at 3.1 percent.
A New York Times analysis of periods of economic difficulties and its effect on wages showed that a recession resulted in an effective pay cut from 3 to 7 percent for the typical American family. The effect is usually felt up to three years, which is often longer than the time an economy is under recession.
Nariman Behravesh, chief economist of Global Insight, said the earliest that American consumers will likely benefit from a real pay gain will be by 2011.
