Why You Might See a Pay Raise Soon

Photo (cc) by GotCredit

As the economy and unemployment rate have improved in recent years, wages have continued to stagnate.

That could start to change soon, however, according to a new outlook from Challenger, Gray & Christmas, an outplacement company that helps workers find new jobs.

The Chicago-based firm does not specify how much it expects wages to rise, but does predict the increase will occur this year.

Challenger, Gray & Christmas’ forecast is based primarily on unemployment trends.

During the economic recovery that started a little over five years ago, an average of:

  • 182,500 new jobs have been created per month overall
  • 250,000 new jobs have been created per month during the past year

That is even better than the economic expansion between 2003 and 2007, which saw:

  • 147,000 new jobs created per month overall on average
  • 239,000 new jobs created per month on average during the strongest year

Currently, the national unemployment rate stands at 5.4 percent, according to the latest data from the U.S. Bureau of Labor Statistics.

John A. Challenger, chief executive of Challenger, Gray & Christmas, explains in a press release:

In these areas, workers already may be difficult to find and there is anecdotal evidence of employers offering better wages and benefits to attract and retain talent…

The return of higher-skilled, higher-paying manufacturing and construction jobs should also lift wages around the country.

(Check out “The 10 Jobs Employers Struggle To Fill” to learn more about which positions have the greatest shortage of qualified candidates.)

A growing awareness of income inequality — the gap between how much money the wealthiest and poorest people earn — is another factor that Challenger believes could improve wages .

This year alone, international think tanks and researchers have declared that the United States’ wage gap is at a record high and that the wage gap is the greatest threat to stability worldwide.

Companies and municipalities seem to be more sensitive to outcry over the issue and have started to boost minimum wages. For example, the city of Los Angeles raised its minimum wage to $15 per hour this week.

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