U.S. Salary-Increase Budgets Hit 25-Year Low

By Staff Report

Feb. 10, 2010

U.S. companies’ budgets for salary increases in 2010 fell to their lowest level in more than two decades, The Conference Board reported Tuesday, February 9.

The 2010 median forecast of salary budgets for increases is 2.8 percent for all employee groups, the lowest level in the 25-year history of The Conference Board’s annual survey on salary-increase budgets.

In addition, changes to salary structures (changes to minimum, midpoints and maximums of pay scales) to account for changes in cost of living and other factors aren’t expected to top 2 percent, according to the survey. That’s below The Conference Board’s forecast of a 2.6 percent inflation rate.

A recovery in compensation is likely a few years away, Gad Levanon, associate director of macroeconomic research at The Conference Board, said in a statement. “In the previous three recessions, compensation began accelerating only several years after employment bottomed,” Levanon said.

In the statement released with highlights of the research, “Salary Increase Budgets for 2010—Winter Update,” Linda Barrington, the organization’s managing director for human capital, said: “U.S. workers will continue to face downward pressure on their salaries and wages. Without the purse strings loosening on financial rewards, employers are going to have to rely on other ways of engaging employees, especially top performers, in order to keep their companies competitive.”

The survey included 285 U.S. organizations. 

Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail

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