For Most of Us, a Pay Raise This Year or Next Is an Open Question
The minimum wage increase Congress approved this month--lifting the hourly standard from $4.25 currently to $5.15 late next year--is expected to boost the pay of perhaps 10 million Americans.
An initiative that will be on the state ballot this November to raise California’s minimum even higher, up to $5.75 an hour, could provide help for as many as 2 million workers.
But for most working Californians, the prospect for pay raises is unclear. Two closely watched prognosticators--the UCLA Business Forecasting Project and the management consulting firm William M. Mercer Inc.--offer sharply different outlooks.
A salary survey released last week by Mercer found that most California workers will get slim increases, with raises averaging 3.8% this year and 3.9% in 1997. By Mercer’s reckoning, average raises have remained stuck below 4% since 1994.
Charles King, the Mercer compensation consultant in charge of the survey, largely blames the state’s high unemployment for holding pay increases here lower than elsewhere in the country. The most recent government figures estimate the jobless rate at 7.1% in California and 5.4% nationally.
Most California employers, King said, “don’t see any reason” to raise wages. “They don’t have to. There’s plenty of labor available at the going rate.”
But analysts at UCLA, in their most recent quarterly forecast, see this as a sizzling year for wage growth. They predict that wages and salaries will rise an average of 6.2%, the highest in 14 years, before settling back down to 3.7% in 1997.
Tom Lieser, associate director of UCLA’s forecast group, attributes this year’s gains to job growth in high-paying industries such as entertainment and software, along with stability in various manufacturing industries.
Part of the reason for the varying outlooks is that the experts are measuring different things. The UCLA economists are trying to gauge the overall economy. The Mercer consultants focused on large employers, and thus neglected small firms and the fortunes of workers at the bottom rungs of the economic ladder.
Still, some of the 240 job categories tracked by Mercer are enjoying hefty pay increases. Leading the way are top legal executives and general counsels, whose pay raises have totaled 34% between 1990 and 1996. Other big gainers, in percentage terms, have been human resource executives, controllers and armed security guards.
At the other end of the scale, entry-level bank tellers saw their pay decline 3.9% over the same period. King attributes the decline to labor surpluses caused by mergers and automated teller machines and other technology. Slim raises also have been the rule for loan service representatives and entry-level legal secretaries.
Separately, Mercer also found that 46% of the employers it surveyed expect layoffs this year, roughly equal with the 45% that expressed such plans last year. The percentage of companies that go ahead with layoffs is likely to be even higher, analysts say, because employers’ tend to underestimate the likelihood of such cuts.
“Companies are perpetually laying off and hiring,” King said.
Number of Disabled Workers Up
Despite suffering a gunshot wound to the spine 12 years ago that left him paralyzed from the chest down, Decton Mitchell had little trouble finding a job recently after completing a computer training program. Today he is a computer network specialist in Pasadena for Kaiser Permanente, the giant health-care company.
Mitchell, 36, lauds Kaiser Permanente for doing a good job of making its office suitable for workers with severe disabilities--providing, among other things, wheelchair ramps and easy-to-open doors. But his situation is hardly an isolated one.
According to a recent Census Bureau survey, the percentage of Americans with severe disabilities and who had jobs climbed from 23.3% in 1991 to 26.1% in 1994. That reflects a gain of 800,000 jobs for people who must use wheelchairs or who have other severe disabilities.
Experts called it a substantial gain in employment for a three-year period. They credit mainly the landmark federal legislation known as the Americans With Disabilities Act, which began removing workplace hurdles in 1992.
“It leveled the playing field for people like myself,” Mitchell said.
Even the lobbyist for a business group that has opposed the act, the National Federation of Independent Business, speculates that the sweeping legislation helped disabled workers land jobs. The NFIB’s Mary Reed said companies may have gone out of their way to hire disabled job candidates out of fear that otherwise they would be sued for discrimination under the ADA.
However, Guy B. Wallace, a lawyer with Disability Rights Advocates in Oakland, countered that the census report “goes to show that when you make opportunities available to people with disabilities, they’ll take them. They don’t want to just sit around getting welfare.”
