Pay raise forecast for 2027 delivers underwhelming news to workers

Workers will likely find it hard to make ends meet again in 2027 because for now, companies are planning to hold the line on pay raises for a fourth straight year, a recent survey shows.

On average, employers plan salary increases of 3.2% based on merit and total salary increases of 3.5% in 2027, according to the Mercer QuickPulse US Compensation Planning Survey of 1,001 U.S. organizations. Total salary increases include merit, promotions, cost-of-living, and other adjustments. These increases are about the same as the actual increases in the past three years, or since 2024, 2025, and 2026, it said.

For Americans, these relatively flat increases are making it harder to keep up with the elevated inflation of the past several years. In July, annual inflation rose 3.4%, basically swallowing the average pay hike and potentially making it harder for Americans to get ahead.

"If inflation went up after wages went up, everyone would love inflation," said Michael Ashton, managing principal at Enduring Investments LLC. "But we all know that inflation sucks, since prices go up and then, if we’re lucky, the boss man will give us a cost-of-living adjustment. It does not happen proactively."

Economic uncertainty is keeping companies…

Original source: https://www.usatoday.com/money/