While unemployment is low and getting lower, wage growth has stalled. Typically, wages increase when the unemployment rate drops. Unemployment is predicted to be under 4% in 2018. Raging against Economics 101, wages are not predicted to grow as they should.
This year looks to be on par with last year, continuing at a 3% average increase. While the Federal Government was just approved a pay increase, civilians employees are typically below the national numbers, with their approved average a 1.4% pay increase and a .5% increase for locality pay. Military members also fall below the national average with a 2.4% increase.
Reasons For Slow Wage Growth
“Companies are budgeting conservatively,” said Kerry Chou, CCP, senior practice leader, WorldatWork. Nevertheless, “I wouldn’t expect to see widespread adjustments to the 2018 budget.”
Benefits, and the costs associated with them, could be impacting the numbers. Some organizations are bolstering compensation with benefits instead of pay, which provides a kinder outlook on the bottom line for shareholders.
Additionally, shifts in technology, replacing workers, and outsourcing can keep salary numbers on the lower side. While technology might replace some workers, advancements like artificial intelligence can open up doors for others. It’s good for individuals and organizations to have an eye on human capital investments that keep up with changing technology, and reshape workforces.
Another consideration to factor into the stagnant wage growth is the ‘graying of the workforce.’ As older workers are replaced with entry-level workers earning less, overall wage growth numbers decrease.
What Stagnant Wage Growth Can Mean For You
The start of a new year is a great time to check out your benefits and assess your spending habits. If your salary or benefits are off track, now is a great time to make plans to change course. Maybe it’s time to update your retirement withholdings or your health savings account.
It’s probably not possible to change what’s been locked in for the year during open enrollment, but you may have some wiggle room with flex time or education benefits. Negotiating better benefits sends a message that you are happy with your employer, but want to find a better win-win spot for both of you. Because we spend a lot of time at work, benefits can often increase job satisfaction with a reduced impact to your employer’s bottom line.
If it’s really about your personal bottom line right now and slow wage growth is discouraging for you, it may be worth comparing your cleared salary with others in your area by using the ClearanceJobs.com salary calculator. One of the fastest ways to increase your salary is to change jobs. See how your salary stacks up, and if you have a personal pay gap with your industry, it may be time to start job shopping.
With a slow, backlogged clearance system, clearance holders have a leg up on the national wage growth numbers. With more open positions and fewer clearances available, employers are left searching for their next candidate in the sea of already employed clearance holders. The job demand for current clearance holders will not magically increase organizational budgets or contract amounts. But it does mean that if you have the qualifications and clearance, you should push for the max salary and benefits, based on the competition and market value of your skills.