2024 salary scoop: What's in the pay raise pipeline for US workers?
Average salary increase in 2024 expected to be nearly 4%, slightly lower than last year.
Curious about your salary prospects in 2024? We've got the scoop on what you can expect from pay raises this year. Here's a breakdown in simple terms:
Average raise salary increase in 2024:
Employers across the US are gearing up to offer workers an average salary increase of nearly 4 percent in 2024, as revealed by Payscale's Salary Budget Survey.
Slight dip in pay bumps:
The projected 3.8 percent pay bumps are a tad lower than last year's 4 percent, indicating a minor dip. Payscale suggests this trend might continue in the upcoming year.
Salary growth - Post-pandemic trends:
Wage growth surged post-pandemic when companies competed for workers. However, recent data indicates a cooling labour market due to increased interest rates by the Federal Reserve.
Elevated interest rates have made business investment pricier, leading to a hiring slowdown. Despite this, a resilient labour market saw private-sector employers adding 164,000 jobs in December.
Annual pay increase in 2023:
According to the ADP National Employment Report, annual pay grew by 5.4 percent for the year, with private sector job stayers earning a median annual pay of close to $59,000.
Salary difference - Changing jobs vs. staying:
Those who changed jobs saw an 8 percent pay increase, a slight decline from the previous month. Job stayers experienced a slower pace with a 5.4 percent pay jump.
Wage-price spiral:
The chief economist at ADP, Nela Richardson, reassures that there's little risk of a wage-price spiral in 2024. The slowing wage growth is seen as a positive sign for real economic growth.
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"We are seeing wage growth move down at this very steady clip. In our view, there's very little risk of a wage-price spiral that will push up inflation in 2024, so that's good news. It's good news for workers because the growth that we're seeing is more and more going to be real growth, not inflation-boosted growth," Richardson said in a press conference.
Impact of inflation on salary growth:
If inflation continues its downward trend, both workers and companies stand to benefit. Lower inflation means real growth for workers and relief for companies facing wage inflation and labour supply challenges.
Wage growth in different sectors:
While some sectors, like Technology and Finance & Insurance, have seen slowing wage growth, Payscale predicts overall strong pay increases in 2024. Variations will exist based on industry and business performance.
Payscale concludes that pay increases in 2024 if realized, would be the first time wage growth surpasses inflation since 2020. The varying rates highlight the need for workers to stay informed about industry trends.
