The majority of workers in the U.S. are not receiving salary increases, according to a new study.
“While the economy continues to improve, it’s disappointing that Americans’ wages have not,” said Bankrate.com chief financial analyst, Greg McBride, CFA. “Though younger workers are experiencing career advancement, older Americans are hampered by stagnant incomes. This makes it even more vital to start saving early, since significant wage gains become less frequent as you get older.”
The data from the study corresponds with the latest jobs report released by the U.S. Labor Department, which said average hourly earnings increased 2.4%, or 63 cents, over the past year. However, according to some experts, wage growth doesn’t necessarily impact individual workers much.
“Each worker exists in their own small labor market—in their local city, industry and for their specific experiences and skills. All of these inputs impact their market worth much more than the larger aggregate wage growth number,” Glassdoor chief economist Dr. Andrew Chamberlain Opens a New Window.
The study also found nearly 40% of workers received a pay raise at their current job in the past year, while 18% took a better paying job.
Most of those who were fortunate enough to receive a pay raise from their current employer saw the increase as a result of a promotion and new job responsibilities. Millennials, ages 18-36, were nearly twice as likely as Gen Xers, ages 37-52, and six times more likely than Baby Boomers, ages 53-71, to have received a raise due to these reasons.
According to the survey, there were fewer cost of living increases this year compared to last and performance-based wage increases accounted for 37% of raises, also down from last year’s 52%.
Certain areas of the U.S. labor market are more prone to seeing wages increase, specifically in sectors such as health care, where nurses and other employees on the “front lines” are seeing gains; wages were up 3.4% to slightly more than $42,000 in October, according to Chamberlain, who cited the aging Baby Boomer population as the reason for a higher demand within the industry.
The retail sector, which has seen its woes in recent years—especially brick-and-mortar stores—also experienced a growth in wages, especially during the holiday hiring period.
“Cashiers, store managers, and roles more related to e-commerce and online retail like truck drivers and warehouse associates have seen above average wage gains,” Chamberlain said.