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Salary Budget Forecasts for 2015
In an article published on its website July 9, 2014, the Society for Human Resource Management (SHRM) published preliminary results of the 2014-2015 Salary Budget Survey conducted by WorldatWork, an association of human resource professionals focused on compensation and benefits.
According to the WorldatWork survey, salary budgets are expected to rise 3% for 2015. The trend is fairly consistent across industry sectors. Only hospital employees and oil and gas industry employees can expect salary increases that differ. Hospital employees are looking at expected 2% salary increases for most employee groups, while oil and gas industry employees are looking at expected 4% increases.
In the same article, a separate Hay Group report also echoed the 3% projected increase in salary budgets for 2015. According to the Hay Group, the projected net gain for 2015 salaries is likely a mere .09% after accounting for a 2.1% expected growth in the Consumer Price Index.
Stephen Miller, CEBS, an online editor and manager for SHRM and author of the article, attributes a slower than expected economic recovery for the limited upward pressure on salary budgets for the coming year.
Recent Decline in Long-Term Unemployment Noted
On July 21, 2014, two economists on the Board of Governors for the Federal Reserve Board, Tomaz Cajner and David Ratner, published their analysis of the recent decline in the long-term unemployment rate.
According to Cajner and Ratner, the Great Recession featured an unprecedented increase in the number of long-term unemployed (defined as individuals unemployed for more than 6 months). In the depths of the recession, the long-term unemployed made up 45 percent of the total unemployment numbers. Through June, that rate is still at 33 percent. By comparison, Cajner and Ratner say the previous peak in long-term unemployment was reached during the 1982 recession and was just 26 percent.
The long-term unemployment rate has dropped 0.5 percentage point since December 2013. The report authors, say this drop accounts for almost the entire decrease in the overall unemployment rate. Cajner and Ratner see the drop in the long-term rate as a positive sign citing several reasons: 1) the drop in long-term joblessness since December comes at the same time as a stable labor force participation rate and a rising employment/population ratio, 2) job-finding rates of the long-term unemployed have increased slightly lately, 3) their ability to find stable employment appears to be improving along with the short-term unemployed, and 4) their attachment to the labor force does not appear to be substantially different from that of the short-term unemployed. Cajner and Ratner also reviewed yearly labor market transition rates, in particular the rates of those that were unemployed a year ago but are either employed or nonparticipants (in the labor market) today. They found that an individual unemployed a year ago has a 38 percent probability of being employed today, only slightly below the same probability before the recession. Also noted, at the yearly frequency, the long-term unemployed are currently more likely to transition to employment than to non-participation in the labor force.