Prices Are Rising, But Salaries Aren’t Keeping Up

Prices are going up, but pay remains stagnant.

Employee salaries are not keeping up with inflation in the U.S. In 2022, the cost of living was at a 40-year high, accompanied by a rise in gas and food prices, according to Essence.

Although inflation has declined from 9% to 3%, it still has not reached the Federal Reserve’s target of 2%, PBS reported. Amid the rising cost of living across the nation, workers are not receiving an increase in compensation to sustain their standard of living.

Talker polled 1,859 employees, of which 46% said they feel “somewhat recognized” at work, while 8% reported they did not feel recognized at all. According to Essence, the absence of recognition at jobs is likely related to a lack of rewards and salary increases. As workers are not recognized or praised for their work and successes within their places of employment, it can translate to not receiving compensation for accomplishments on the job.

In 2021, the average cost of rent was $2,000 a month, a 15% increase over the previous year. Although expenses have increased, pay raises do not match this energy.

In a WalletHub report from April 2023, William K. Tabb, professor of Economics, Political Science & Sociology, Emeritus – Queens College and Graduate Center of the City University of New York, says the inflation costs were initially attributed to “spending to help those impacted by Covid….”

Talker’s report on worker recognition highlights concerns addressed by employees regarding how valued they feel by the companies they work for, Essence noted.

A January 2023 report from Workhuman revealed that 50% of employees feel “somewhat valued” while 10% do not feel “valued at all.” The report stated, “A place where employees don’t feel valued likely isn’t a place they want to return to.”

The January report noted that diversity, equity, and inclusion efforts are often the first to get overlooked “as economic uncertainty continues into the new year.” As a result, forward-thinking organizations will benefit over their competition because of the value that will be placed on the employee.