Some Pay Hikes Drop Below 4%

June 24, 2002 ( - For the first time in nine years, average salary increases in many key industries, including manufacturing, trade, and utilities, have dropped below 4% for major employee groups, The Conference Board reported.

The decline is attributable to the recent economic downturn, a continued atmosphere of uncertainty in the aftermath of September 11, the Enron collapse, and the woes of Arthur Andersen and other firms, Conference Board researchers said.

However, in general, the average 2003 pay increase will be a uniform 4% for all employee groups in all industry categories, the report said.

Although the majority of employees will still receive the average 4% increase, a higher proportion of all employee groups will get lower increases both this year and next compared to preceding years.

According to the report, commercial bankers should do well next year with a raise as high as 4.9%, while executives from diversified services, insurance, and manufacturing could get as much as a 4.5%-pay hike.

Towards the lower end were payroll non-exempt trade workers, whose projected raises could be as low as 3%, according to the report.

2002 Pay Figures

The actual median salary increase in 2002 for non-exempt workers of all industries averaged 3.7%, compared with an earlier estimated 4.0% for the year, according to the Conference Board.

The actual medium salary increase for executives averaged 4.0% in 2002, compared with an earlier estimated 4.2%.