Workers Could See Their Largest Pay Bump in 15 Years in 2023

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Are you going to get a raise?

Key points

• New data reveals that the average U.S. income could rise 4.1% in 2023.
• That may not be enough to keep pace with inflation.
• Some workers may want to push for higher wages.

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It's easy to say that workers have the upper hand. Many companies want to hire so much that they're willing to pay more for talent.

In the coming months, employers will need to do their part. Giving out raises is a good way to get that done.

Things are looking up from a compensation point of view. Workers in the U.S. will get an average 4.1% raise in the next five years, according to a recent survey. That would be the largest pay increase in a long time.

An increase in pay is good news for workers. It's possible for workers to build savings, pay off credit card debt, and move closer to other goals if their salaries are higher.

It is important to keep in perspective the 4.1% raise. It may not be enough for a lot of people.

Why even a generous raise may not cut it

Workers may not be able to maintain their buying power in the face of inflation if a 4.1% pay increase is not enough. The latest Consumer Price Index reading shows that the rate of inflation has gone up recently. Many workers will struggle if inflation continues at that rate.

Many of the companies that allowed their employees to work from home during the Pandemic are now calling them back to work. Employees are having to contend with high gas prices and commute costs after having spent months without taking into account those costs.

Workers should fight for more

Wage growth is respectable, but it may not be enough to keep up with inflation. Employees may want to fight for the highest wages possible, even if that means having to negotiate.

Companies cannot afford to lose quality employees. Mass resignations may have to be avoided by ramping up payroll.

It's not easy to fight for higher pay. There is a lot of salary data out there. If you want a raise that is more generous than what your employer offers, you should do some research. A 4.1% raise may seem generous at first glance, but not for an employee who is earning 10% less than the average worker.

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