Will workers get a pay raise this year?

Date posted: March 23, 2011

With unemployment so high workers have just felt lucky to have a job. They haven’t really focused on pay raises. But now with the economy coming back and unemployment being down slightly, will there be a little bit more in paychecks? N.C. State University economist Mike Walden responds.

“I think … this year 2011 is the year that we have the best chance in a number of years for some people to get a pay raise. One big reason why people didn’t get a pay raise in the past years, well, one of course was the recession. The other was very low inflation. In fact in 2009 we actually had deflation — prices were going down, which meant if you didn’t get a pay raise, but didn’t get a pay cut, you actually got ahead of the game.

“But now we see both inflation beginning to bubble up a little bit, and we are seeing hiring coming back. And so these two elements together make some experts think that some people at least will get pay raises. The pay raises will be relatively mild. They will probably be in the low single digits. They won’t be for everyone; they are primarily going to be in the private sector — in companies experiencing the biggest jump in business. So that is going to be technology, management, some manufacturing firms.

“But if you don’t get a pay raise and you keep your job and you don’t get a pay cut with inflation running about 2 to 2.5 percent, at least you are not sinking very fast.”

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