If your wallet has been feeling lighter, you're not alone: Salary increases this year have fallen from 4 percent in 2002 to 3.5 percent—the smallest uptick in a decade, according to a June report from the Conference Board.
As the economy continues to sputter, businesses are increasingly cautious about doling out raises, says Charles Peck, a compensation specialist for the New York-based Board, which measures economic data. Still, valued workers get compensated in other ways. "Rather than lock in a fixed, permanent expense in the form of a raise," he says, "employers are relying on bonuses, which are one-time and tied to productivity."
If that doesn't provide much solace, here's some perspective: In 1975, when wages jumped an average of 10 percent, Peck notes, inflation was running at 12 percent. "Back then, it seemed that salaries were soaring, but inflation was eating it up at the supermarket," he says. "With inflation currently at 2.5 percent, that's still one point less than salary increases."
The Board is projecting that 2004 pay hikes will look much like this year's, but don't rule out a more upbeat scenario, says Peck. "With the world in such flux, it's hard to point to a particular direction that the economy, and therefore salary increases, will take. But barring an unforeseen calamity, the recovery should gain strength, and, once it does, it should auger well for raises."