According to The Conference Board’s November Salary Increase Budget Survey published Tuesday, American workers are expected to see a wage bump of about 3.9% in 2022. Not only is that figure up from the 3% number reported in April, but it’s also the highest year-to-year wage bump since 2008.
The estimated wage bump for American workers is already happening, forcing companies to raise their budgets for salaries. According to the survey, “average 2021 actual total salary increase budgets jumped from 2.6% in the April 2021 survey to 3% in the November 2021 survey.” Back in October, the Labor Department reported a 1.5% wage jump in the third quarter. That’s the highest such jump seen in the department’s 20-year history of keeping such records.
The Conference Board cited two major factors in the increased amount of money companies are putting towards salaries: “Growth in wages for new hires and accelerating inflation.”
“The November Salary Increase Budget Survey shows that almost half of respondents (46%) said that the increase in wages of new hires played a factor in salary increase budget estimates for 2022,” The Conference Board wrote. “39% said that increased inflation played a factor.”
According to the survey, the wage bump for American workers “is especially strong for workers under the age of 25 and for people who switched jobs in the past year.” Back in October, the Labor Department reported a record 4.3 million American workers quit their jobs in August.
“This suggests that much of the wage acceleration has been among workers who were recently hired,” The Conference Board wrote.
The wage bump for American workers is also in response to inflation that has persisted for months now. Last month, the Labor Department reported a 6.2% year-to-year increase in consumer prices and an 8.6% increase in producer prices for the month of October. The consumer price increase was the highest since 1990, and the producer price increase tied the record set a month prior.
Labor shortages, caused in part by the record number of quits, are also playing a factor in the wage bump for American workers. The Conference Board said those shortages will continue through 2022.
“During that time, overall wage growth is likely to remain well above four percent,” The Conference Board said. “Wages for new hires, and workers in blue-collar and manual services jobs will grow faster than average.”