Salaries of U.S. workers will probably
rise this year at the slowest pace in at least 10 years as
companies try to control costs amid weak economic growth, a
private survey showed.
Companies surveyed by the Conference Board, a New York-based
research group, said they expect to boost salaries by 3.5 percent
this year, down from a previously projected 4 percent. That would
be first time in a decade for median increases to move
“significantly” below 4 percent, the group said. Companies also
projected a 3.5 percent increase for 2004.
“U.S. business continues to struggle back from the recent
economic downturn,” said Charles Peck, the Conference Board’s
compensation specialist. “Caution is the prevailing mood, with
companies paying careful attention to controlling costs.”
The forecast average pay raise would be about a percentage
point higher than inflation. The research group projected a 2.6
percent increase in the consumer price index for this year and 2.7
percent for 2004.
Salary budgets may be even lower than projected because
companies are taking other measures to cut wage and salary costs.
Those include layoffs, hiring freezes, furloughs and delayed merit
increases, the Conference Board said.
Recent reports suggest that joblessness is dragging down
consumer confidence and spending, which economists said could
weigh on growth in the second half of the year. Consumer spending
accounts for at least two-thirds of the economy.
Bloomberg News
