More Jobs, Less Money: Why Companies Aren't Giving Raises

More Jobs, Less Money: Why Companies Aren't Giving Raises

If you’re looking to land a new gig sometime soon, you’re in luck, as U.S. businesses are hiring at a steady pace.

But if you’re banking on a big raise at the end of the year? Well, don’t get your hopes up.

That’s according to the latest quarterly survey by the National Association for Business Economics, which found that U.S. firms were less likely to increase pay in the third quarter of 2014 than they were earlier in the year.

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The recent dip marks the first time in about a year that the number of companies raising salaries actually decreased. Just 24% of companies boosted wages between July and September, compared to 43% between April and June.

Meanwhile, only one-third of survey participants predicted that their companies would raise salaries between October and December, which is about the same proportion that expected a pay increase in the last survey.

Typically, what happens when hiring remains steady is that wages go up, as employers duke it out for the top talent. So what’s behind the current wage stagnation?

One potential explanation is the idea that there’s still a decent chunk of people looking for work, so companies don’t feel like they’re under the gun to boost pay. According to the Bureau of Labor Statistics, 9.3 million people remained unemployed in September, and more than 7 million are working part time but seeking full-time work.

Another issue is slowing sales and profits: Less than half of firms surveyed said their sales increased in the third quarter, compared to 57% in the second quarter. And while 56% of companies said their profit margins had basically flat-lined, 14% said they saw smaller profits.

Of course, these stats don’t imply that you can’t get a raise if you deserve one. Thinking about negotiating for a pay bump? Read our guide to up your chances of success.

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