November 2007

Raises not keeping pace with cost of living

A recent survey by the American Payroll Association (APA) reveals American workers are not receiving sufficient pay raises to cover the increase in cost of living and have no faith in the future of Social Security.

“Getting Paid in America,” an online survey conducted among more than 47,100 American workers to provide insight into how workers are paid in America, noted the government increased Social Security benefits by 3.3 percent in 2007 to account for an increase in cost of living. It then asked respondents whether their most recent pay raise covered the increase in cost of living calculated by the government.

Less than 37 percent of respondents answered “yes,” while about 45 percent answered “no.” Another 18 percent replied they “did not receive a pay raise.”

While these figures are not encouraging, they are favorable when compared to results of the 2006 survey, in which nearly 82 percent of respondents said they did not receive pay increases to cover the increase cost of living.

Last month, the Social Security Administration announced a 2.3 percent cost of living increase for 2008.

The survey also asked about the future of Social Security benefits. Noting that in 2008 the first baby boomers will reach age 62 and become eligible to receive Social Security benefits, the survey asked participants whether they thought Social Security benefits would still be available when the last baby boomers reach age 67, or full retirement age, in 2031. About 67 percent replied “no” to this question.

Source: Compensation, www.compensation.blr.com

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