Paychecks expected to rise an average of 4% this year, survey finds

by: David Lazarus, Nexstar Multimedia Cable

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(KTLA) — Amid stubbornly high inflation, average paychecks will rise about 4% next year, according to a survey of employers by consultancy Willis Towers Watson.

However, a 4% wage hike – the largest in 15 years – will do little to dampen inflation which is currently at a 40-year high of 9.1%.

In other words, despite employers’ modest efforts to keep workers’ compensation in line with the economy, many will actually experience a reduction in wages and a decrease in purchasing power.

“Worning economic conditions and new ways of working lead organizations to continually reassess their salary budgets to stay competitive,” Hatti Johansson, research director at Willis Towers Watson, said in a statement.

More than a third of the nearly 1,400 organizations surveyed said they planned to give raises more frequently than in the past, and many said they were likely to give workers two pay increases next year.

More than two-thirds of respondents said they aim to increase employee satisfaction through more remote working.

Unlike the private sector, the Social Security Administration sets annual cost-of-living adjustments for recipients based on the rate of inflation.

The nonpartisan Senior Citizens League estimates that Social Security recipients will receive a 10.5% cost-of-living adjustment for 2023. This would translate to an average monthly increase in checks of approximately $175 to $1,668 .

Although rising health care costs reduce this increase, it is a fair way to help people weather inflationary storms.


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