More workers are expected to get pay raises in 2025, according to one early prediction, but those raises will be smaller.
Americans as a whole are enjoying a healthy level of job security with job openings rebounding in November. The job market added 227,000 workers in a solid recovery from the previous month.
Still, higher prices are a huge frustration and may have workers thinking about asking for a raise in the new year.
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The Salary Budget Survey released by the company Payscale shows U.S. employers are budgeting for 3.5% raises for 2025. That's a slight drop from 4% in 2023, and the 3.6% raises averaged in 2024.
The positive news though, is that most employees, 85%, are expected to get a pay bump.
"One of the interesting things that we saw was that for the most part, the people who got bumps in salary last year did so by staying at their current employer," said Matt Schulz, chief credit analyst at LendingTree.
A recent LendingTree survey found that the majority of full-time workers, 82%, who asked for a pay raise in the past year got one. About half received a raise worth less than $5,000.
"But that means that almost half of people say that they got more than $5,000," Schulz pointed out.
Of course, asking your boss for a pay raise is no easy feat.
"There's some, you know, switch," said LiveCareer's Jasmine Escalera, "some trigger that is causing you to say, 'You know what, I deserve more,' and you should follow that."
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Before you approach the topic of a pay raise, Escalera recommends you be prepared with a list of the contributions you've made to your company and any steps you took to learn or build up new skills.
"Even if you're not asking for a raise right in that moment," Escalera said, "you should be taking every opportunity when you're in front of your manager to not just talk about task, but to talk about contribution."
The career expert says the best time to bring up wages or salaries is around a standard review period – although that's not a requirement.
Escalera recommends keeping a journal so you're ready to showcase your accomplishments whenever the conversation does happen.
"You have to learn how to self-promote, increase your visibility and have open and honest conversations about your value," she said, "so that no matter where you go, you are always capable of getting what you need."
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LendingTree's survey found about a quarter of full-time workers actually took a pay cut this year. Some were laid off or fired, while others took a lower-paying job.
Still, there is optimism with about 65% of workers expecting their pay to increase in the next year.
"There's certainly a lot of volatility, a lot of unpredictability in the economy right now," Schulz said. "But the good news in this survey is that people do seem generally pretty optimistic about where things are going."
