During our negotiations for a new HUCTW-Harvard contract for 2022-2024, the issue of pay increases during a time of extremely high price inflation has been a central question. With inflation stuck at its highest levels in 40 years (around 7% in the Boston area for the 12 months prior to December 2022) union and management negotiators have struggled to agree on a pay program that will address the problem of inflation and its negative impact on HUCTW staff in a fair and effective way. In the course of negotiations, HUCTW leaders have carried out research into the pay increase practices of other employers in the employment market, pulling together data from the reports of several highly-regarded organizations that study average changes in pay across large groups of US employers.
HUCTW’s review of 2022 increases shows that there has been some variation in pay increase averages across multiple employers in 2022, depending on whether the employers studied were union or non-union, and also related to different geographic regions and sectors of the economy. But, in general, the average wage increases ranged from 4.8% to 6.3%.
A key point to note is that these are averages – which means that while some employers delivered salary increases below these averages, an approximately equal number of employers delivered salary increases above these averages. The Pearl Meyer report gives us a glimpse into that distribution, with its finding that a quarter of the companies surveyed had salary increases of 6% or higher.
In doing our comparison research, HUCTW negotiators examined many union contracts and published raise numbers for 2022 from individual unions and employers, but the strongest and most consistent data was from broad, established surveys and reports analyzing the 2022 raises from hundreds of union contracts and employers:
- Pay Increases in Union Contracts: Bloomberg Law is a widely respected subscription service that uses data analytics and AI to produce legal research, including research on compensation. They produce a Quarterly Union Wage Data report that analyzes wage settlements in union contracts every three months. The most recent edition, for the second quarter of calendar year 2022, includes 411 collective bargaining agreements covering 787,000 workers in the US. First-year 2022 pay raises in that study averaged 5.3% And, Bloomberg Law reports, if one-time lump-sum payments are included along with pay increases, the first-year gains for union contracts averaged 6.3%. The Quarterly Union Wage Data study also breaks down results into different economic sectors – State & Local Government, Private Manufacturing, and Private Non-manufacturing. For first-year pay increase for contracts in the second quarter of 2022 in the Private Non-manufacturing sector (the sector that would include private universities) the average raise to base salary for 2022 was 6.3%. Full Bloomberg Quarterly Report on Union Wages
- Pay Increases at Large US Companies: Pearl Meyer is a consulting firm regularly cited by major news outlets, which advises employers on compensation design. In May of 2022, Pearl Meyer carried out a survey to understand how large US companies were designing their salary increase programs for 2022 and why. 337 companies participated in the survey, the majority from large companies that earned over $300 million dollars per year in revenue. The headline number in the report is that the overall average across all employers surveyed for 2022 was a 4.8% salary increase. More than a quarter of the employers surveyed reported having a 2022 salary program with an average raise to base salary of 6% or higher. Responding to questions about why their organizations were delivering significantly higher increases in 2022 compared to previous years, 74% of respondents cited either “retention concerns” or “higher cost of living/rising inflation” as reasons for delivering larger pay raises.Full Pearl Meyer Survey
- Boston Area Wage Growth: The US Department of Labor’s Bureau of Labor Statistics studies prices, wages, and productivity as the principal fact-finding agency for the federal government in the field of labor economics and statistics. The most recent BLS report on Changing Compensation Costs in the Boston Metropolitan Area showed that in the 12-month period ending in September of 2022, wages and salaries for private employers in Greater Boston increased by 5.7% on average. Full BLS Report on Changing Compensation Costs in Boston Metro Area