Maine employers prepare to pay big raises in 2022
A graph shows the results of a Mainebiz poll last week asking readers about their plans for wage increases.
The state’s employers are bracing to make big bumps in employee pay this year, according to a Mainebiz survey.
Nearly 3 in 5 poll respondents said they are planning at least “significant” increases in what they normally spend on raises, and 22% are budgeting for one of the “largest increases ever” in pay. The Mainebiz poll was conducted online last week and drew 178 responses from readers.
An important point is that the survey asked readers to gauge planned pay hikes beyond those that typically would be budgeted.
Another 35% (62 respondents) indicated their businesses will make raises at those typical levels. Only a dozen readers said they plan to cut pay.
While the Mainebiz results provide just a snapshot of employers’ plans, an in-depth new study by the Conference Board seems to bear out the numbers.
The survey of 240 U.S. companies, conducted in November, predicts employers will increase their 2022 budgets for raises by an average of 3.9%. That's the highest such projected increase since 2008 and nearly a full percentage point higher than the 3% forecast in a similar April survey for the coming year.
The Conference Board, a national, nonpartisan business group, has been conducting the surveys since 1985.
The November survey also found that companies had expanded their budgets 3% for 2021, after initially increasing them 2.6%, according to the April poll.
This year's fatter paychecks may be a reflection of two trends: wage hikes needed to attract and retain employees, and the impact of soaring inflation.
In the Conference Board study, 46% of survey respondents said competitive hiring pressure was the main reason for their budget increases, while 39% attributed them to inflation.
In Maine, the upward path of wages began years ago and now has momentum, said Glenn Mills, deputy director of the Maine Department of Labor’s Center for Workforce Research.
“Adjusted for inflation, average wages in Maine have increased at historically high rates since 2014 as the labor market tightened. The fastest gains have been during the pandemic,” he told Mainebiz.
“Labor market conditions are likely to remain tight in 2022 as the virus continues to disrupt supply chains, workplaces, schools, and child- and elder-care arrangements. This is likely to keep conditions tight and continue to impact wages.”
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