When was the last time you got a pay raise? And did you have to change employment to get it?
The cost of living goes up. Inflation continues to rise. But to get their paychecks to increase to meet those demands on their bank accounts, one expert says the reality is most Americans have to find a new job.
“About two-thirds of those who got pay increases chalked it up to performance-based promotion or taking on new responsibilities,” said Greg McBride of Bankrate.com during an appearance on WWL Radio.
“Workers are definitely feeling it, particularly on the lower end of the income spectrum,” McBride told Newell Normand.
McBride said the lack of consistent cost-of-living raises has diminished the buying power of a large segment of the workforce.
“What you need over time is for your pay to at least keep pace with, if not increase faster than, the cost of inflation,” McBride said. “Otherwise you’re actually losing buying power. And that can happen at even a modest rate of inflation.”
That buying power has been cut almost in half over the last three decades, according to McBride, and it’s not likely that workers will see relief any time soon.
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“I don’t see much moving of the needle in terms of pay raises vs. not getting pay increases,” McBride said, noting that 56% of the workforce did not receive a pay increase over the last year, and that that percentage has held steady for decades.
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