Salaries Projected to Increase 3.5% This Year

Pay raises for most salaried workers will increase by 3.5% this year as employers keep budgets in check, the Conference Board reported Thursday.

The expected rise makes this the fourth consecutive year that salaries are growing by less than 4%, and the trend is expected to last through 2007.

“Moderate inflation has allowed employers to continue to control payroll costs,” Charles Peck, a compensation specialist at the Conference Board, said in a statement. “This continued control is reflected in the pattern of salary increase budgets this year compared with last year’s projections.”

The board, a nonprofit research group, expects inflation to rise by 3.1% this year and 3.3% in 2007. Pay raises for employees working in the diversified financial services and insurance industries were higher than projected while raises for those working in diversified services were slightly lower, the board said.

The board projected that the overall increase in salaries in 2007 would be 3.5%, the same as this year. Executives are expected to see a slightly bigger rise of 3.8%.