Where Did Your Pay Raise Go? It May Have Become a Bonus
By PATRICIA COHENFEB. 10, 2018
The recent stock market rumpus has been set off in part by fears that a tight labor market and quickening wage growth are a foretaste of higher inflation and interest rates. But sustained raises for American workers may be possible only if employers can break a habit: handing out one-time bonuses in place of salary increases.
A growing preference among employers for one-time awards instead of raises that keep building over time has been quietly transforming the employment landscape for two decades. But it was accelerated by the recession’s intensity, which made employers especially cautious about increasing labor costs. The stream of companies announcing bonuses for their employees in the wake of the newly minted tax cuts is just the latest expression of the trend.
This little-noticed shift in how employers compensate workers could also help explain one of the economy’s most persistent puzzles: why a hot labor market has failed to ignite bigger increases in wages.
There has been “a continuing dramatic shift in the mix of compensation,” Aon Hewitt, the human resources consulting firm, noted last summer in its latest annual survey of company pay practices.
more
https://www.nytimes.com/2018/02/10/business/economy/bonus-pay.html?emc=edit_ta_20180211&nl=top-stories&nlid=57435284&ref=headline
= new reply since forum marked as read
