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
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