3 Reasons You Should Ask For a Raise at Work

2014 may be the "Year of the Pay Raise"

Mar 23, 2014 at 10:24AM

Ever since the recession, employers have had all of the power when it comes to negotiating pay rates. But that trend may be shifting, leading to higher likelihood of raises across the employment spectrum. Here are the top three reasons why your plea for a salary boost may be granted more readily this year.


1. Unemployment rates
With the national unemployment rate falling below 7%, and expected to reach pre-recession levels by year end, employers are losing a valuable resource for keeping pay low -- a desperate workforce.

With most Americans finding work (even if its not full-time), there will be fewer workers for employers to reach out to in order to replace higher-paid employees. Instead, business owners and other managers will find that they need to reward their employees for staying in their current position.

The impact will be seen first in cities nearing full-employment levels, like Boston and San Francisco. Some evidence of wage pressure has already been reported by the Federal Reserve. In a survey this month, the Fed reported "moderate" wage pressure in Milwaulkee, where unemployment sits at 4%. The survey also reported pay increases and wage pressure in Dallas, which has an unemployment rate of 5.6%.

Of the metropolitan areas nationwide,155 of 372 are enjoying unemployment rates at 6% or below. While the cities may be the first to experience solid wage growth, the impact is sure to spread.

2. Employers are ready
During the recession in 2008, 75% of employers surveyed by compensation consultant Towers Watson were freezing wages. Now, businesses are recognizing that the tides are turning in favor of their employees.

According to another Towers Watson survey of 900 mid- to large-size companies, employers expect to dole out an average wage increase of 3% this year. Though this matches what employees have received in the past two years, a steady pace is positive news for the workforce.

Hand Blomstrom

Source: Flickr/Blomstrom

With only 4% of responding companies reporting no intention of raising wages, the odds favor employees seeking a boost to their income.

3. You deserve it
Since its peak in 2007, the median family income has fallen by 6.4%, which is no small amount to most American families. Largely caused by the higher frequency of layoffs and pay freezes, declining household income has put pressure on families as bills continue to increase.

Much like the city-centric trend, industries that favor highly skilled workers will likely offer higher pay raises, faster. This bodes well for the tech-heavy San Francisco area.

And while there will still be a wide gap between executive-level pay boosts and those of the average worker, high-performing workers received a 4.5% bump last year -- which may translate to a similar payout this year.

A good year
Slated to get a nice pay boost this year? Maybe it's time to start thinking about where to put that extra cash. But investing in a select number of great stocks, you can set yourself up for success in the years to come.

But there's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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