Pay Increases Lag Behind Inflation

The recent WorldatWork 2011-2012 Salary Budget Survey found that, for the first time since 1980, the U.S. rate of inflation exceeded the average salary budget increase. For the period measured, May 2010 through April 2011, the U.S. Consumer Price Index (CPI) was 3.2 percent, while the average salary budget increase was only 2.8 percent. The survey included data from over 2,400 organizations of varying sizes and industries, representing approximately 15 million employees.

A variety of factors including continued high unemployment rates are blamed for the gap. Experts interpreting the results say that the demand for labor must increase before businesses will raise wages to stay competitive. The survey did show, however, that mining, quarry, and oil and gas companies are projecting higher than average salary budget increases, 4.1 percent, due to a shortage of skilled labor.