BLR: Merit Budgets Below 4% in 2004

November 25, 2003 ( - Most employers are planning merit budgets below 4% in 2004, representing some of the smallest increases for workers since 1985.

Examining merit budgets by group, exempt and nonexempt white-collar employees can expect merit increases of 3.4%, unionized plant employees 3.2%, and non-unionized plant employees 3.3%. General increases will be slightly lower in each category, according to Business & Legal Reports’ (BLR) Pay Budget Survey.

The largest merit increases overall were reported by medium employers (100-500 employees): 3.3% to 3.5% for all employees. They also reported the largest increases for exempt and unionized plant employees, at 3.5% each. Small employers (fewer than 100 employees) reported the largest increases for non-unionized plant employees and nonexempt white-collar employees, both at 3.4%. Large employers (more than 500 employees) reported merit increases of between 3.1% and 3.3% for all employees.

Of the 1,438 employers participating in BLR’s survey, the highest merit budgets were found in the South region at 3.1% to 3.5%, while the Central/Rocky Mountain/Southwest region was the lowest, 2.8% to 4.0%. Other merit increase budgets by region:

  • East Central – 2.9% to 3.3%
  • Far West – 2.9% to 3.5%
  • Northeast/Middle Atlantic – 2.9% to 3.5%.

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