With unemployment declining, employers are starting to
experience competition to retain their employees. The result of this is another slight increase in worker
salaries. On average, salaries are
expected to increase by 3% in 2015, up from a 2.9% increase in 2014.
The magnitudes of salary increases that we have seen have
been in a negative relation with the unemployment rate. In 2009, when unemployment was around
10%, salaries only increased 2.1%.
Now that unemployment is down to 6.2%, the salary increase is up to
3%. Since more jobs options are
available, employers want to keep their better employees by enticing them with
salary increases. However, it is
believed that this 3% increase is the largest that we will see and employers
will start using bonuses or other incentives to keep their employees.
http://money.cnn.com/2014/08/07/pf/worker-pay/index.html?iid=SF_BN_River
It is good to see unemployment so low and wages going up again. It's also good to see that companies are valuing their employees and willing to pay them more to keep them. Since their wages are going up their productivity should increase too and help fuel the economy even more. Lowering unemployment even more and increasing wages in the future. Hopefully this trend continues to happen in the future.
ReplyDeletethis increase in wages may keep some employees and motivate those that are kept but then theres also those teens that will then be unemployed due to an increase in wages when theres other that are older and more qualified for the job. But it is good to see our economy rising but someone else is always affected by a better economy.
ReplyDeleteThe overall economy has been improving so an increase in wages is to be expected. The main goal of retaining well qualified employees can be achieved through this incentive. However, less part time workers and teenage unemployment is probably seen now due to the increase of wages.
ReplyDeleteI like to see companies taking care of their skilled employees and treating them to higher wages when productivity matches. As Chandler commented, due to the low unemployment and higher wages, teenage skilled workers will be less and less employed. While we have these companies increasing wages there is someone else on the other end of the spectrum who is paying the price ,therefore, it's a complicated issue to resolve.
ReplyDeleteThis raise in salary is a good way to keep experienced employees at their current job, but it also important to realize that with this raise, the unemployment of teenagers will probably increase due to companies having less money to spend on hiring unexperienced workers.
ReplyDeleteIt's good to see unemployment decreasing and wages increasing. Also I believe that increases in wages can do great things for a company. Giving a employee extra incentives to work their hardest can bring out the best in them and ultimately benefit the company. Hopefully it will even increase more than 3% soon.
ReplyDeleteSeeing wage increase is always a positive statistic. This shows that companies are valuing their skilled employees. This increase in wage rate will ultimately lead to higher production due to the fact that the employees are being payed and appreciated more.
ReplyDeleteIt's great that companies are finally having to compete to retain employees. For many years after the recession people would take any job they found and wouldn't even have the option of leaving for better pay. This is also good because with an increase in pay comes an increase in overall confidence in the future of the economy which will increase spending and boost the economy. However, one thing to note is that if many companies are increasing their wage rates then the prices will adjust and since nominal wages and prices are increasing the real wage isn't really increasing.
ReplyDeleteSeeing wages increase is a very positive asset for employees and companies. With the higher wages employees are making more money and they also have more of an incentive to perform better for their company. With a larger incentive to perform better companies will be experiencing higher productivity. Even if salaries do not increase more than three percent in the future, the use of bonuses will only increase this incentive.
ReplyDeleteWith unemployment rate falling below 6% recently, and this increase of 3% in pay for next year, it is indeed positive to say that the US economy is gradually getting back to its feet after the devastating effects of the 2008 recession. In my opinion, companies should at first increase the wages of their loyal, experienced employees to reduce any voluntary turnover. In this way, these experienced employees will be able to work being more committed in their job, and hence the company's productivity will increase in the long run. If this trend of higher productivity in companies continues all over the nation, the US economy will definitely get a boost and that economy shall further improve quickly.
ReplyDeleteThe projected rise in wages is a good thing, but I wonder what the inflation will be next year. If inflation is around the Fed's goal of 2% then workers will be better off with a 3% increase in wages. If inflation somehow exceeds the Fed's goal and surpasses 3%, then workers will not be better off.
ReplyDeleteWith competition increasing, good workers are in high demand which means firms will increase salaries to keep current experienced employees. Besides a wage increase, now employees will want to be more productive in their work place so that they stick around with the possibility of a wage increase. Over the past year, wages didn't experience any growth, so its good to see that hopefully wages will go up 3% next year.
ReplyDelete