Companies planning to give big pay raises for employees in 2022

Your paycheck may be a little heftier in 2022.

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Americans are expected to see their biggest wage increase in more than a decade, according to a report released Wednesday by the think tank, The Conference Board.

According to the report, businesses are expected to boost employees’ paychecks by 3.9%, signaling the fastest wage growth since 2008, The Washington Post reported.

The Conference Board came to that conclusion after conducting a survey of 240 U.S. businesses in November, CNBC reported. Half of those businesses represented more than 10,000 workers, according to the website.

Employers were asked how much they projected their wage costs to increase in 2022 for their current workforce, CNN reported. The increase does not include bonuses or one-time compensation payouts.

According to the report, 46% of employers cited the need to offer higher wages to new employees, while 39% said that increased inflation figures played a factor.

“The big jump was for executives, for regular employees, and for hourly employees,” Gad Levanon, vice president for labor markets at The Conference Board, told the Post.

The growth of wages increased dramatically since the spring as the economy reopened, CNBC reported. While employers needed to get up to speed with their workforce, workers in the lower wage sectors had more opportunities to quit for higher-paying jobs, according to the network.

According to ADP, a payroll company, people who changed jobs saw average wage growth of 6.6% in September, a boost from 5.1% in the first half of the year.

Approximately 4.2 million Americans quit their jobs in October, the Post reported, citing statistics released Wednesday by the Bureau of Labor Statistics.

“When more experienced workers feel that their pay advantage is no longer significant, they may seek new jobs in the tight labor market, which leads to high labor turnover of more experienced workers,” The Conference Board stated in its report.

“People switching jobs are getting much higher wage growth than people staying in the same jobs,” Levanon said.

While the wage increase is positive news, it may be tempered by rising inflation. The consumer price index jumped 7.8% from February to October, the Conference Board stated in its report.

“What would normally be really good news, I think is pretty substantially tempered by the context of consumer price increases,” Michael Strain, an economist at the American Enterprise Institute, told the Post. “Some groups of workers, relative to a year ago, have lower inflation-adjusted wages. And for all workers it’s a lot less of an increase in purchasing power than it otherwise would.”