On the surface, things are going well for American workers. The unemployment rate is a low 3.7 percent, according to the Bureau of Labor Statistics. And, on average, hourly wages have been increasing since the Great Recession, according to the Federal Reserve Bank of Atlanta. But are Americans really feeling the benefits of this strong labor market?
To find out whether individual workers’ personal economies are improving, GOBankingRates surveyed more than 2,000 Americans to find out if they got a pay raise over the past year. The survey also sought to find out how confident workers are that they’ll receive a pay hike before the year ends, and, if not, whether they’d consider getting a new job that pays more.
Keep reading to find out whether most Americans saw their pay increase and what you can do to increase your chances of getting a raise.
Women Got Raises at a Higher Rate Than Men
Overall, the survey found that just 30 percent of respondents said they got raises so far in 2018. However, some generations were more likely to see their pay increase than others. And women were slightly more likely than men to have gotten a raise.
According to the survey, 30 percent of women said they got a raise in 2018 compared with 28 percent of men. And Generation Xers ages 35 to 44 had the highest percentage of respondents — 40 percent — who said they received a raise. Older baby boomers ages 65 and older were the least likely to have gotten a raise, with just 13 percent saying they saw their compensation increase.
In general, earnings rise as workers get older — but only up to a certain point. Peak earnings years tend to be between ages 45 and 54, according to the BLS. Although younger Gen Xers ages 35 to 44 are getting raises at a higher rate than other age groups, those raises will compound and help them hit those peak earnings years in their later 40s and early 50s.
Of the survey respondents who got raises, the average pre-raise income was $50,092. The average post-raise income was $61,213 — a whopping increase of nearly 23 percent.
|Americans Who Received a Raise in 2018|
|% of Respondents Who Received a Raise in 2018||Average Raise Increase in 2018|
|Ages 18-24, Post-Millennial/Gen Z||33%||26%|
|Ages 25-34, Millennials||38%||27%|
|Ages 35-44 Younger Gen X||40%||33%|
|Ages 45-54, Older Gen X||31%||14%|
|Ages 55-64, Younger Baby Boomers||28%||14%|
|Ages 65+, Older Baby Boomers||13%||22%|
|Respondents were asked, “So far in 2018, did you receive a raise or compensation increase at your current job?”|
But Women’s Raises Were Lower Than Men’s
Although the survey found that a higher percentage of women than men received raises, the actual raise amount women got was lower than men’s pay hikes. Among the women surveyed who got raises, their annual salary rose, on average, from $42,859 to $52,258 — an increase of $9,399. The average salary among men who got raises climbed from $57,417 to $70,511 — an increase of $13,094.
It’s worth noting that the difference in the average percentage increase in salaries for women and men who got raises was minimal: 22 percent versus 23 percent. However, the amount of the pay increase women get is smaller, on average, than what men get even when the percent increase is the same because of the gender wage gap between women and men.
There are steps women can take to increase their pay — from researching their worth and getting comfortable with negotiating salary, to improving their skill set and being willing to switch jobs for more money. However, one of the best things women can do to avoid falling behind men in compensation is to avoid taking time out of the labor force. A study released by the Institute for Women’s Policy Research found that women who took off work for just one year had earnings that were 39 percent lower than women who worked all 15 years between 2001 and 2015.
Keep reading to see how women stack up in the economy.
Top Reasons Americans Got Raises in 2018
When it comes to the reason why Americans got raises, the survey found that most believe their pay hikes were the result of their hard work. Nearly a quarter of respondents said they got a raise in 2018 because they accomplished or exceeded goals and expectations. Another 12 percent said they saw their compensation increase because they took on more responsibilities, and 11 percent said their raise was a result of consistently completing work on time. Only about 4 percent said they got paid more because of good negotiating skills.
|Why Americans Received Raises in 2018|
|Reasons||% of Americans Who Chose Each Reason|
|I accomplished or exceeded goals/expectations||23%|
|My company gives out raises to account for cost-of-living increases||17%|
|I had a great attitude and/or worked well with team members||14%|
|I willingly took on more responsibilities and ownership||13%|
|I consistently completed my work on time||11%|
|I made a positive impact on my company’s bottom line||10%|
|I grew in my role and became more independent||9%|
|I had strong negotiating skills||3%|
|Respondents who received a raised were asked to please explain why they think they received this raise.|
However, about 17 percent of respondents said they got paid more because their company gives raises to account for cost-of-living increases. Baby boomers ages 55 to 64 were most likely to think their raise was the result of a cost-of-living increase — with nearly 31 percent of this age group choosing this response. On the other hand, millennials ages 25 to 34 were the most confident of any age group that they got a raise because they accomplished or exceeded goals — with 27 percent of this age group selecting this reason.
Women were more likely than men to say they got a raise as a result of a cost-of-living increase — 18 percent versus 15 percent. However, women also were more likely than men — 18 percent versus 9 percent — to say that their good attitude and ability to work well with team members resulted in a pay hike. Men, on the other hand, were more likely than women to say they got a raise because they increase their company’s bottom line.
|Why Americans Received Raises in 2018, by Age|
|Reasons||Post-Millennials/Gen Z||Millennials||Younger Gen X||Older Gen X||Younger Baby Boomers||Older Baby Boomers|
|I accomplished or exceeded goals/expectations||21%||27%||20%||26%||25%||17%|
|My company gives out raises to account for cost-of-living increases||4%||14%||18%||20%||30%||13%|
|I had a great attitude and/or worked well with team members||16%||15%||9%||16%||9%||22%|
|I willingly took on more responsibilities and ownership||12%||16%||11%||14%||9%||15%|
|I consistently completed my work on time||16%||6%||14%||12%||11%||7%|
|I made a positive impact on my company’s bottom line||8%||8%||13%||7%||10%||15%|
|I grew in my role and became more independent||17%||10%||13%||3%||2%||11%|
|I had strong negotiating skills||6%||5%||4%||3%||2%||0%|
|Respondents who received a raised were asked to please explain why they think they received this raise.|
One-Quarter of Americans Believe They Can Still Get a Raise Before 2019
Most Americans who haven’t received a raise yet don’t expect to get one before the end of the year. The survey found that 53 percent of respondents are very unconfident they won’t get a raise this year, and another 9 percent are somewhat unconfident. On the other hand, 16 percent of respondents are very confident they will get a raise before the end of the year, and another 9 percent are somewhat confident.
Millennials ages 25 to 34 are the most confident of any age group that they will get a raise, with 25 percent saying they’re very confident. Adults 65 and older are the least likely to think they’ll see their pay increased before the end of the year, with nearly 68 percent saying they are very unconfident they won’t get a raise.
For those employees not getting a raise this year, they might be getting a bonus instead. More and more employers are handing out bonuses rather than raises now because they are a one-time expense rather than an ongoing cost to doing business, the New York Times reported.
But One in Three Will Find New Jobs in 2019 If They Don’t Get a Raise
The majority of Americans who didn’t get a raise this year are willing to stick it out at their jobs. However, the survey found that one in three would consider getting a new job that pays more in 2019.
Men were slightly more likely than women to say they’d look for a higher paying job because they didn’t get a raise — 31 percent versus 28 percent. A separate GOBankingRates’ survey found that there are big differences in the reasons men and women change jobs. Women are much more likely than men to leave a job because it has little to no growth opportunity or because the job didn’t align with their career goals.
The survey found that adults ages 18 to 24 were the most likely of any age group to consider getting a new job that pays more because they didn’t get a raise. Nearly 45 percent of this age group said they’d switch jobs, followed by 38 percent of both millennials ages 25 to 34 and young Gen Xers ages 35 to 44. As adults age, they’re less likely to leave a job because they didn’t get a raise, the survey found.
Switching jobs to earn more actually can pay off, according to a study by staffing and recruiting firm 24 Seven. Full-time workers who switched jobs in 2018 saw their pay increase 12 percent, on average. However, the longer workers are in a job, the smaller the pay hike they see when switching jobs. Those who’ve been at a job four or more years see just a 4 percent bump in pay by switching jobs compared with 12 percent increase workers who’ve been at a job less than a year tend to get when they make a job move.
Learn more about what prompts Americans to leave a job for a new position.
How You Can Increase Your Chances of Getting a Raise
To increase your chances of getting a raise, start by asking for one. According to a 2018 study by compensation data company Payscale, 70 percent of workers who asked for a raise got one. And 39 percent of those who asked, got the increase they requested. However, only 39 percent of workers have actually asked for a raise, according to Payscale.
To get the raise you want, make sure you’re prepared before you ask. Make a list of your work accomplishments, focusing on how your achievements have helped the company reach its goals and improve its bottom line. Also, research what others in similar positions are earning on websites such as Payscale.com and Salary.com to know what you’re worth.
Once you’re armed with this information, schedule a time to meet with your supervisor to discuss why you deserve a raise. If your supervisor says the company can’t afford to give you the raise you want, consider asking whether you could get other benefits instead — such as a more flexible work schedule or more vacation time. It might also be a sign that you need a new job that pays better.
More on Jobs
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- Don’t Apply for a Job After You Turn This Age
- Watch: The Key to Negotiating a Higher Salary at Your Job
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Methodology: For this survey, GOBankingRates asked the following six questions: 1) So far in 2018, did you receive a raise or compensation increase at your current job? 2) What was your annual salary before the increase (in dollar figures and before taxes)? 3) Please explain why you think you received this raise. 4) What was your current annual salary now (in dollar figures and before taxes)? 5) How confident are you that you will receive a raise before 2018 ends? (Out of 5). 6) Since you did not receive a raise in 2018, will you consider getting a new job that pays more in 2019? The survey was conducted by Survata from Nov. 16-17, 2018, and 2,003 adults were polled. There’s a margin of error of 3.1 percent.