If you thought that 2019 would be the year that American wages finally caught up with our rebounding economy, a recent report from HR Dive is here to tell you: nope.
According to the story, “the economy has held steady for years and the market continues to tighten, yet massive market responses have not materialized,” a paradox that has “confounded economists for some time.”
And while “recent optimism has led some to predict that wages may finally be rising,” the numbers would indicate that those wages will increase only around 3 percent in 2019, a bump that basically covers year-over-year inflation and nothing else.
Compounding matters, a recent survey “showed that employees’ total earning opportunity — potential earnings between salary and variable pay — has decreased over the past three years.”
Though there is data to indicate that those working in small- and medium-sized businesses have a better chance of receiving a meaningful raise — “it’s ‘easier to look at things on a case-by-case basis’ when the organization is smaller” — bigger companies remain resistant to adjusting salaries in response to market conditions, especially when jobs can be outsourced easily and short-term domestic contract workers can be found quickly.
And that stagnation isn’t without consequence. The story found that “talent leakage has become more commonplace” and that companies are now twisting themselves in knots to try to come up with non-traditional compensation packages to remain competitive.
Or they could just pay people more. ¯\_(ツ)_/¯
You can read more about it at HR Dive.