It’s still a tough time to be an American worker. Automation is only one of several factors that seem to be making it harder and harder to get that coveted raise. According to the Hamilton Project wages are about 10 percent higher now than they were 1973, after adjusting for inflation. That’s about 0.2 percent in real wage growth each year. Don’t spend it all at once!
Executives from AT&T and the Coke franchise of Florida were unusually candid about the trend at a panel event organized by the Dallas Federal Reserve on Saturday, reported by Axios. In short, you shouldn’t expect company-wide raises any time soon.
“I don’t need that many guys to install coaxial cables,” said John Stephens, AT&T’s chief financial officer. The implication here is that companies like AT&T may still have have more workers than they need, which means less leverage for even tough negotiators.
Wage Stagnation Causes
There’s no one explanation for a 40-year trend, and economists don’t always see eye to eye about what’s making it harder for Americans to get ahead. In trying to assess the causes of the problem, the Hamilton Project identified no fewer than 13 different factors that may be at play. The so-called education premium — the extra money you earn when you acquire new skills — is rising and globalization is making it easier for companies to export jobs. Automation isn’t helping, either, and organizations like unions that help workers bargain for better wages have seen their membership decline.
“Rising wage inequality has been a defining feature of the American economy for nearly four decades.” Elise Gould of the Economic Policy Institute wrote in March. “Rising inequality means that although we are seeing broad-based wage growth, ordinary workers are just making up lost ground.”
3 Ways to Get a Raise at Work
3. Line up another offer.
People who request a raise after revealing they have received a counter offer from another employer are perceived as more deserving, according to Hannah Riley Bowles of the Harvard Kennedy School. The caveat: You have to willing to accept the offer should your current employer turn you down, since you won’t exactly be able to count on cashing in points for loyalty.
2. Sit next to a striver.
This one’s easier (at least in theory.) Some research has suggested that, at least for lower-skilled professions, sitting next to the office star increases productivity enough to translate into higher earnings. Peer pressure is a powerful thing.
1. Be more willing to move.
Another theory about why wages aren’t growing is that people are increasingly less willing to move to a new city or region where their skills are more highly valued (or where they can get a higher quality of life.) According to the Hamilton Project, job hopping creates about 1 percent in earnings growth each quarter in normal economic conditions.