Weakest Link: U.S. Sees Worst Pay-Growth Recovery Among Developed Nations

Photo Source:

www.infoworld.com

Low-paying jobs were hit hard, while
senior positions saw modest pay gains

Eight years after the beginning of the Great Recession, the
United States has suffered the weakest salary recovery among developed nations.

Adjusted for inflation, salaries in the U.S. have actually
decreased 3.1 percent on average since September 2008—despite gross domestic
product (GDP) growth of 10.2 percent. In contrast, Canada’s salary recovery has
been the best among developed nations, with a 7.2 percent salary growth on
average, with a GDP gain of 11.2 percent.

These newly released
findings
 are from the Hay Group
division of consultancy Korn Ferry, and are based on salary and job data for 20
million workers in more than 25,000 organizations across 110 countries. The
data show the real or absolute changes in pay, factoring in consumer inflation—revealing
that some employee groups have seen a real drop in purchasing power while their
nominal income may have increased modestly.

Other developed nations experienced flat to modest
inflation-adjusted salary growth since 2008, while emerging markets saw both
the best (China, Indonesia and Mexico) and the worst (Turkey, Argentina, Russia
and Brazil) salary growth worldwide.

“While overall, global economists point to this
recovery as one of the worst in history, there are political, economic and
social reasons for the disparate salary fluctuations in different
countries,” said Benjamin Frost, London-based global product manager
for pay at Korn Ferry Hay Group.

Unbalanced
Salary Growth in U.S.

In the United States, the pace of the current expansion has
been the weakest of any since 1949. In terms of salary growth, the findings
revealed that:

  • Employees with lower-paying/entry-level positions—such as clerical assistant, network analyst, payroll
        coordinator or production-line supervisor—have experienced a 14.8 percent
        inflation-adjusted drop in wages on average since the start of the
        recession in 2008.
  • Those in professional mid-level roles, such as a brand/product manager or network
        administrator, fared much better with 2 percent salary growth with
        inflation factored in.
  • Senior managers, such as an IT manager or chief accountant, saw 3.5
        percent real salary growth on average.

“Imbalances in supply and demand are behind the
differences in pay growth at different job levels in the United States,”
Frost said. “For lower-level jobs, technology and offshoring are among the
factors causing an oversupply of people—and driving weak pay growth. At the top
end, key leadership and technical skills are in short supply, leading to
stronger pay increases.”

Article
Source: http://bit.ly/2c8CFq4

Key Takeaways:

1.    The
United States saw the weakest salary recovery after the Great Recession despite
a fairly high GDP growth.

2.    Depending
on the type of job held, the salary growth rates drastically differ.

3.    The
reasons for these differences are amount of people who hold the skills to
complete the job. The lower level jobs see an oversupply of employees resulting
in lower pay whereas the top paying jobs seek people who have specific skills and
see a short supply which draws a higher compensation.

Follow
Converge HR Solutions on FacebookTwitter,
and LinkedIn to
keep up with us! Visit www.convergehrsolutions.com to learn more about how we can
help your business.
 

0 Comments

Submit a Comment

Your email address will not be published.

white converge hr logo

Reducing time spent on HR operations

Allowing you to focus on growing your business

info@Convergehrsolutions.com

610-296-8550

1055 Three Westlakes Drive, 3rd Floor, Berwyn, PA 19312

Skip to content