Maybe, there is no one who does not like the salary rise – everybody loves it. This raise increases our family budget and gives us a feeling of upcoming promotions or other career changes. But at the same time when our salary increases, all of us want to know – if we get a fair wage for our job. Besides it, we also want to know other three factors that relate to our pay - the standard salary increase in our area, how the salary rises in our sphere, and how the wage of our positions increases. These questions make up an inseparable set, and we combine them under the general name "average salary rise".
'Average Salary Rise' is one of the most important indexes for many people because it can be compared with inflation. The word "average" shows that there are some nuances working against us such as inequality of salaries for different posts in a company, difference of salaries in different cities or countries, unequal pay increases for various branches. That is why it is hard to state the exact salary rise rate without considering all these factors. But generally speaking, the average yearly rise varies within 3-5%. We shouldn't forget that there are many other factors influencing our income such as bonuses and allowances for certain positions.
We have a clearer vision of what wage we can ask for or expect when knowing this information. Moreover, this info helps us get a higher salary. That is why we need to know how much the increase in salary is on average in our country.
So, in our article, we will discuss the middle annual salary raise in the United States and the things related to it.
In the past, the standard wage increase across the spheres, areas, and posts was around 3-5 percent. But it does not signify that you need to be upset if your salary increase is below this level or be happy if it is higher.
Nowadays, the times are hard; that is why predicting the salary raise is challenging. But the data analysis can be helpful a little bit. Even though the employment level still remains low, the salary increases faster compared to the past several years.
During the first quarter of this year, the salary increased to almost six percent compared to the last year. At the same time, in 2020, the wage grew to 2.5 percent compared to 2019.
There are some factors that influence wage growth. So, when determining if you get a fair wage, you should take into account the following aspects:
- The level of the economy: The macro-level cases (like the Covid-19 pandemic or recession) harm the American economy. And it directly influences the salary. When defining the wage of every worker, the employers take into account two factors – how much money they have and the level of growth they expect in the future. In short, if you see that your organization faces some financial challenges, you need to lower your expectations about the wage raise.
- The shortage of qualified workers: The low unemployment rate forces employers to pay more attention to the quality of the employees rather than the quantity. Besides, when hiring new personnel, they are trying to attract them with higher salaries.
- The sphere where you work: You can expect salary growth if you work in the promising with a tendency to develop sphere (like IT or informational technologies). If you work as a seller in the grocery or video rental shop and wait for at least ten% wage growth, you need to open your eyes and accept the reality.
- The number of years you have been working in your profession: If it is high, do not expect a salary raise. In this case, other people who just entered the sphere will get a greater wage.
- The promotion to a higher position: When you get a promotion, you increase your responsibility and expertise. So, to get an increased salary, you should work on your professional growth.
- The size of the company: The larger companies can afford a good and steady salary raise system. If you work in such an organization and your employer offers to increase your wage by 1-2% annually or you expect higher results from the development, this inefficiency in your work may be a good reason to find another job and increase your income.
- The results of the company: The salary raise depends on how well the company performs. If it does not reach its targets, you can expect low salary growth or no wage rise at all.
- The post you hold: Some professions suffer from the lack of professional employees. On its own, it doesn’t signify that you have more chances to get the increased wage in these positions. The actual beneficiaries are the jobs with a low level of professional and willing-to-work employees, plus these jobs are in demand. A good example is the sphere of nursing.
- The quality of your performance: If you take into account all factors influencing the salary raise, it becomes obvious that only your professional growth and hard work can improve your financial stability. So, if you want to achieve success in this sphere, you should invest more time and effort in your professional growth. And, of course, you should know how to invest in the US stock market to make your savings work for you.
- The area: Like the spheres that experience ups and downs, the geographical regions experience the same challenges too. The problem here is not only the population (its growth or reduction). The issue also lies in the local economy – how it is growing (or, maybe, not growing), has surplus or deficit, etc. You can only hope for wage growth if the city where you work has a good economy, and you see that the local companies can work better and earn more profit.
- Your education: The employers pay you for your knowledge, experience, and skills. So, if you are educated in a sphere that is not in demand at the moment, there is no sense to expect high wage growth. You should consider investing in another direction or retraining.
Now let’s see the data showing how the annual salary has grown. For research, we have taken the wage budget survey data of WorldatWork 2020-21.
So, in 2019, the planned wage growth for all worker types was around 3.2 percent, and the average wage increase was 3 percent. In 2020, the planned salary was almost three percent (2.9 to be exact), and the average was 3 percent. If we look at the projected budgets for 2021, we will see that these numbers coincide.
Today, American companies offer a low-average salary (not above-average wage) raise. And they predict that this tendency will dominate the next year too. So, you can have a clearer idea of what it means – ten times more American companies show their budgets for 2020 with zero wage growth.
Nevertheless, there are over 80% of employers expect to increase the wage in 2020 year. More than 70 percent of American companies still increase their salary between 3-4 percent. We advise you to be skeptical about this since we don’t know how the Covid-19 pandemic can affect some spheres and how they’ll cope with those consequences.
The United States also expects that the salary based on merits will also grow – by 2.6 percent (that is lower than it was in the past). As for the high-specialists wage, it’ll increase by 3.6 percent (that is also lower than it was earlier).
And now let’s see what spheres expect wage increase.
Such spheres as entertainment, arts, and recreation have experienced the highest salary growth – for 3.3 percent. The worst wage increase was in the following spheres as utilities and energy – almost two percent.
As for the job categories, there are some who have met the wage growth. The posts in the transport sphere have experienced the most significant increases in terms of salary – over four percent. As for the lowest increase, it refers to the positions in the design (or arts) and recruiting (only two percent).
And finally, what also matters is the metro region you live. For example, we take the Metro region in Seattle. Here, the annual salary has risen to over three percent. Or if we take Huston, we will see that the wage has grown for only a little bit more than one percent here.
We have one piece of advice for you – you can also examine the more focused surveys made by the local companies or research whether your organization releases the wage increase level for the organization’s jobs. If you have more concrete information about it, you can better understand your salary – whether you get the fair wage and how to define the salary increase value.
To sum up, it is not that bad that the projected salaries are related to population growth. At least, you can estimate your income for next year based on the experience of the previous years. But remember – this data is rather approximate.
Now let’s make a small conclusion here about wage growth in 2020-21. The level of salary increase value depends on how developed is the sphere where you are employed.
We conclude that, according to the reports made by WorldatWork 2020-21, the average annual salary growth in the US is 3 percent.