Companies are planning raises in 2022—here's how much workers can expect

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Companies are planning raises in 2022—here's how much workers can expect. (via CNBCMakeIt)

estimates that between October 2020 and October 2021, the cost of goods and services that the average American buys increased by 6.2%.

This can result in a wage-price spiral, or when higher prices and rising pay feed into each other and accelerate even more. Businesses will have to decide how much to raise their salaries to keep their employees, Levanon says, while also deciding how much to pass on those costs to the consumer.Levanon says the momentum for rising salary budgets will be strong in the coming months as the labor market continues to favor worker demands over employer hiring needs.

Some companies may have to revise their planned raises even higher. Levanon points out that lot of companies decided on their 2022 raises a few months ago before we had a clear picture of how much rising wages for new hires, as well as inflation, would impact the labor market. "Now, they will see what other companies are doing, and that may incentivize raised salaries even more," Levanon says. "I expect if we do this survey again in three to four months, we'll get even higher numbers."

Union wages, meanwhile, are tied to long-term contracts and could adjust upward in the next year or two, he adds.

 

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