Hoping for a Raise? Here’s How Much Most People Are Getting
Nearly all companies plan to give raises to their employees next year, with an average salary bump of 3 percent, the same increase workers received this year, according to a new survey released Monday by Towers Watson.
Raises for executives and management will be 3.1 percent.
“To a large extent, 3 percent pay raises have become the new norm in corporate America,” Sandra McLEllan, North American Practice Leader for Towers Watson said in a statement. “We haven’t seen variation from this level for many years.”
Related: The Real Root of America’s Wage Problem
While the average raise is 3 percent, companies plan to tie the amount of individual raises to worker performance. Employees with the best reviews will receive an average 4.6 percent increase in salary, while workers with below-average ratings will get less than 1 percent.
The survey also found that companies are shifting their compensation packages to include more short-term incentives and bonuses. Eighty-five percent of workers took home a bonus this year, up from 81 percent this year. Nearly 90 percent of exempt employees were eligible for an annual or short-term bonus.
Even as unemployment has finally fallen, wage growth since the Great Recession remains largely stalled. Last month, wages for civilian workers grew just 2.1 percent, according to the Employment Cost Index.
Fed Chair Janet Yellen, who is looking for economic growth before instituting a rate hike, has said that stagnant wages are one factor hampering such growth. After all, consumers can’t increase the amount of goods and services they can purchase if they aren’t increasing their pay.
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Marco Rubio Says There’s No Proof Tax Cuts Are Helping American Workers
Sen. Marco Rubio (R-FL) told The Economist that his party’s defense of the massive tax cuts passed last year may be off base: “There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,” Rubio said. “In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”
For Richer or Poorer: An Updated Marriage Bonus and Penalty Calculator
The Tax Policy Center has updated its Marriage Bonus and Penalty Calculator for 2018, including the new GOP-passed tax law. The tool lets users calculate the difference in income taxes a couple would owe if filing as married or separately. “Most couples will pay lower income taxes after they are married than they would as two separate taxpayers (a marriage bonus), but some will pay a marriage penalty," TPC’s Daniel Berger writes. “Typically, couples with similar incomes will be hit with a penalty while those where one spouse earns significantly more than the other will almost always get a bonus for walking down the aisle.”
Trump Administration Wants to Raise the Rent
Housing and Urban Development Secretary Ben Carson will propose increasing the rent obligation for low-income households receiving federal housing subsidies, as well as creating new work requirements for subsidy recipients. Some details via The Washington Post: “Currently, tenants generally pay 30 percent of their adjusted income toward rent or a public housing agency minimum rent not to exceed $50. The administration’s legislative proposal sets the family monthly rent contribution at 35 percent of gross income or 35 percent of their earnings by working 15 hours a week at the federal minimum wage -- or approximately $150 a month, three times higher than the current minimum.” (The Washington Post)
New Push for Capital Gains Tax Cut
Anti-tax activists in Washington are renewing their pressure on lawmakers to pass new legislation indexing capital gains taxes to inflation. The Hill provided an example of such indexing that Grover Norquist recently sent to Treasury Secretary Steven Mnuchin: “Under current policy, someone who made an investment of $1,000 in 2000 and sold it for $2,000 in 2017 would pay capital gains taxes on the $1,000 difference. But if capital gains were indexed, the investor would only pay taxes on $579, since $1,000 in 2000 would be equivalent to $1,421 in 2017 after adjusting for inflation.” Proponents of indexing say it’s just a matter of fairness, but critics claim that it would be just another regressive tax cut for the wealthy. Indexing would cost an estimated $10 billion a year in lost revenues. (The Hill)
Bernie Sanders to Propose Plan Guaranteeing a Job for Every American
Sen. Bernie Sanders (I-VT) is preparing to announce a plan for the federal government to guarantee a job paying $15 an hour and providing health-care benefits to every American “who wants one or needs one.” The jobs would be on government projects in areas such as infrastructure, care giving, the environment and education. The proposal is still being crafted, and Sanders’ representative said his office had not yet come up with a cost estimate or funding plan. Sen. Kirsten Gillibrand (D-NY) last week tweeted support for a federal jobs guarantee, but Republicans have long opposed such proposals, saying they would cost too much. (Washington Post)