Nearly all companies plan to give raises to their employees next year, with an average salary bump of 3 percent, the same increase workers received this year, according to a new survey released Monday by Towers Watson.
Raises for executives and management will be 3.1 percent.
“To a large extent, 3 percent pay raises have become the new norm in corporate America,” Sandra McLEllan, North American Practice Leader for Towers Watson said in a statement. “We haven’t seen variation from this level for many years.”
While the average raise is 3 percent, companies plan to tie the amount of individual raises to worker performance. Employees with the best reviews will receive an average 4.6 percent increase in salary, while workers with below-average ratings will get less than 1 percent.
The survey also found that companies are shifting their compensation packages to include more short-term incentives and bonuses. Eighty-five percent of workers took home a bonus this year, up from 81 percent this year. Nearly 90 percent of exempt employees were eligible for an annual or short-term bonus.
Even as unemployment has finally fallen, wage growth since the Great Recession remains largely stalled. Last month, wages for civilian workers grew just 2.1 percent, according to the Employment Cost Index.
Fed Chair Janet Yellen, who is looking for economic growth before instituting a rate hike, has said that stagnant wages are one factor hampering such growth. After all, consumers can’t increase the amount of goods and services they can purchase if they aren’t increasing their pay.
Top Reads from the Fiscal Times:
- Fiorina Takes on Trump in a Brave Battle of the Sexes
- When Buying Car Insurance, Young Drivers Should Stick with Mom and Dad
- Trump’s Campaign, Leaking Oil, Rumbles Onward
The stark and growing divide between urban/suburban and rural districts was one big story in this year’s election results, with Democrats gaining seats in the House as a result of their success in suburban areas. The GOP tax law may have helped drive that trend, Yahoo Finance’s Brian Cheung notes.
The new tax law capped the amount of state and local tax deductions Americans can claim in their federal filings at $10,000. Congressional seats for nine of the top 25 districts where residents claim those SALT deductions were held by Republicans heading into Election Day. Six of the nine flipped to the Democrats in last week’s midterms.
Ten companies, including nine pharmaceutical giants, accounted for half of the health care industry's $50 billion in worldwide profits in the third quarter of 2018, according to an analysis by Axios’s Bob Herman. Drug companies generated 23 percent of the industry’s $636 billion in revenue — and 63 percent of the total profits. “Americans spend a lot more money on hospital and physician care than prescription drugs, but pharmaceutical companies pocket a lot more than other parts of the industry,” Herman writes.
Federal, state and local governments spent about $441 billion on infrastructure in 2017, with the money going toward highways, mass transit and rail, aviation, water transportation, water resources and water utilities. Measured as a percentage of GDP, total spending is a bit lower than it was 50 years ago. For more details, see this new report from the Congressional Budget Office.
The GOP tax cuts have provided a significant earnings boost for the big U.S. banks so far this year. Changes in the tax code “saved the nation’s six biggest banks $3.3 billion in the third quarter alone,” according to a Bloomberg report Thursday. The data is drawn from earnings reports from Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo.