Talking about your salary was once considered taboo. But things are changing today. Labor laws now prohibit pay secrecy. Workers, especially millennials, are clamoring for pay transparency, forcing companies to follow suit.
Getting workers to talk about their pay helps them assess if they are fairly compensated. With that information, they can make better career choices. On the employer’s side, there is research that suggests that pay transparency leads employees to better performance and company loyalty.
Some companies have used transparent pay policies to address wage inequality, an issue prevalent in the labor market today. Getting pay data also helps employees and employers navigate thorny conversations around pay increases, pandemic-related pay cuts, and minimum wage. With available information around average earnings, workers can decide if getting a higher education will be beneficial to them. Below are some salary statistics for 2020 that you need to know.
44 Salary Statistics You Must Know for 2020
1. Workers can Expect Only a Small Bump in Yearly Wages.
Nearly half of US workers have seen their salaries increase in 2019 compared to last year. However, surveys by HR experts project that workers can’t expect a dramatic pay increase in 2020. HR professionals observed that employers are judicious about where to spend salary budgets because of the uncertainty of what’s ahead. They would instead allocate salary increases to top-performing or high-potential employees. Another reason is that companies are spending more on hiring new employees than keeping current employees. As a result, salary increases for Gen Z workers are higher than overall wage growth rates.
- 49% of workers in the US reported receiving higher pay last 2019.
- Salary budgets in the US are expected to increase by 3.3% on average. Median increases have remained at 3% for the past nine years.
- The overall salary structure adjustment was pegged at 2.2% for 2019.
- On average, the base pay increased to 8.9% for employees who got promoted and got a pay raise.
- Young workers aged 20 to 24 have seen their wages increase by more than 5%.
- The wage gap between workers aged 20-24 and 25-34 is at its smallest in 36 years.
- Twenty-one percent or less than a quarter of US employers will add to their merit increase budgets in 2020.
- Weekly earnings for workers in small businesses in the US grew by 4.13% year-over-year.
- Hourly earnings in small businesses were highest in western regions at $29.32 an hour.
- Consequently, hourly earnings in small businesses in the western regions grew by 3.68% in December 2019.
Source: WorldatWork 2019-2020 Salary Budget Survey
2. Coronavirus Affects Employers and Workers Alike.
As the COVID-19 pandemic brings the economy to a grinding halt, both employers and employees feel its impact on their cash flow. While most employers plan to give out salary increases, others are undecided or will cancel pay hikes altogether. Instead of additional pay for on-site workers, the majority of employers will be providing non-cash benefits.
On the other hand, employees are experiencing pay cuts or reduced work hours. Without an emergency fund, a third of Americans struggle to pay household bills. The financial constraints are more sharply felt for those in the low-income bracket.
- 57% of companies have already paid or plan to pay salary increases in 2020.
- 19% of companies still have to decide on giving salary increases.
- 17% said they have decided not to push through with salary increases.
- 65% of organizations that require employees to work on-site during the coronavirus pandemic are not planning to give extra pay. However, they will provide other benefits like meals and daycare.
- 9% of organizations that require employees to work on-site during the pandemic have no plans at all to provide extra pay or other benefits.
- Only 26% of employers will be giving hazard pay to employees during the pandemic.
- 43% of US adults say that they or a member of their household took a pay cut because of the coronavirus pandemic.
- Six out of 10 Hispanic adults say that they or a member of their household took a pay cut due to the coronavirus pandemic.
- 53% of lower-income adults say they will be unable to pay some of their bills due to COVID-19 job losses and pay cuts.
3. The Fight for Better Minimum Wage Continues.
Wage rates have been changed 22 times ever since the Fair Labor Standards Act was enacted in 1938. Despite these increases, the minimum wage continues to stir up debates because wage rates don’t automatically catch up to the cost of living.
The current minimum wage is set at $7.25 per hour, which has remained stagnant since 2009. In 2019, Democrats in the US House of Representatives passed the Raise the Wage Act to raise federal minimum wage rates to $15 by 2025. Though the bill has yet to be tackled in the Republican-led Senate, states have passed their own legislation to implement the $15 wage rates by as early as 2024.
- Guam, Virgin Islands, the District of Columbia (D.C.), and 29 other states have minimum wage rates that are higher than federal minimum wage rates.
- Puerto Rico, the Commonwealth of Northern Mariana Islands, and 16 other states have wage rates equal to the federal minimum.
- Only five states have no minimum wage rates. These are Alabama, Louisiana, Mississippi, South Carolina, and Tennessee.
- 58.1% of all wage and salary workers were paid hourly in 2019.
- Service occupations, specifically those related to food service and preparation, had the highest number of workers earning equal to or below minimum wage. On average, there were 19,726 workers with hourly rates at or below the minimum wage.
- Increasing wages to $15 will affect 33.5 million workers. It will impact mostly adults aged 20 and above, followed by full-time workers, then women.
- Increasing the federal wage rates to $15 by 2024 will improve the pay of about 40 million workers. This is equal to 26.6% of the US labor force.
- 67.3% of the working poor in the US will get a pay increase if the $15 wage rate increase is implemented by 2024.
Minimum Wage Earners by Occupation
Number of workers (in thousands) who earned equal to or less than the minimum wage
Sales and office occupations: 20.2
Sales and office occupations
Service occupations: 19.7
Management, professional, and related occupations: 18.9
Management, professional, and related occupations
Production, transportation, and material moving occupations: 13.9
Production, transportation, and material moving occupations
Natural resources, construction, and maintenance occupations: 9.4
Natural resources, construction, and maintenance occupations
Source: Bureau of Labor Statistics, 2019Created by CompareCamp.com
4. The Gender and Race Wage Gap Is Pervasive.
The Equal Pay Act and the Civil Rights Act prohibit pay discrimination based on gender and race. However, there is still work to be done to make equal pay for equal work more than just a slogan. Data suggests that Latin, Native American, Black, and Asian women earn less than white, non-Hispanic males. Without the pay gap, women will be able to afford the costs of tuition, childcare, and health insurance premiums.
Wage discrimination exists for men, too. PayScale data reveals that Black, Hispanic, and Native American men earn less than white, non-Hispanic males. However, there is pay parity for Pacific Islanders, and Asian men even earn more than white men. But it’s also important to note that Asian men are paid the lowest rates for managerial jobs.
- Latinas earn $0.54 for every dollar that white, non-Hispanic men earn.
- Native American women earn $0.54 for every dollar that white, non-Hispanic men earn.
- Black women earn $0.62 for every dollar that white, non-Hispanic men earn.
- Asian women earn $0.90 for every dollar that white, non-Hispanic men earn.
- Black American men earn $0.98 for every dollar that a white man earns when their job and qualifications are considered.
- Hispanic men earn $0.99 for every dollar that a white man earns when their job and qualifications are considered.
- Pacific Islanders earn $1 for every dollar that white men who have the same job and qualification earn.
- Asian men earn $1.02 for every dollar that white men who have the same job and qualification earn.
5. Higher Education Means Higher Wages.
Education is an investment that only grows more expensive every year. Since the 1990s, the average costs of tuition and fees have increased significantly. For instance, out-of-state tuition and fees in public universities jumped to 181% in 2019.
But as data from the Bureau of Labor Statistics show, those with higher educational attainment outearn those with lower educational attainment. They typically earn over three times more than those with lower educational attainment.
- Doctoral degree holders had the highest median usual weekly earnings at $1,883.
- Professional degree holders had the second-highest median usual weekly earnings at $1,861.
- Master’s degree holders had median usual weekly earnings of $1,497.
- Bachelor’s degree holders had median usual weekly earnings of $1,248.
- Those with less than a high school diploma had the lowest median usual weekly earnings at $592.
- Those who graduated with an MBA in 2019 had an overall average salary and bonuses of $106,757.
- MBA graduates from the Wharton School of the University of Pennsylvania earned $181,927. Such amount is the highest average salary and bonus among graduates of the top 12 MBA schools in the US.
- Class of 2019 MBA graduates who worked in the consulting industry earned an average salary of $140,187.
- In contrast, MBA graduates who worked in government reported the lowest average salary at $74,825
Source: Bureau of Labor Statistics, 2019
Moving the Pay Conversation Forward
In sum, 2020 will be a challenging year for employers and employees. Lower than the double-digit projected growth for salary increases coupled with pandemic-related salary woes will put a strain on the labor market. Also, wage inequality brought about by race and gender continues to be a barrier to economic mobility. On the bright side, state-led legislation is seeking to improve the federal minimum wage for workers paid hourly. While cost-prohibitive, education remains to be the key to unlocking better opportunities and, in turn, higher pay. Paying attention to these key statistics will help employers and employees navigate the currently uncertain world of work.
- Workers’ Raises Are Outpacing Managers’ Pay Gains
- 2020 Salary Budget Growth Expected to Notch Just Above 3%
- Wages Stall as Companies Spend Generously to Recruit, Not Retain
- How Organizations Are Handling Rewards and Hazard Pay Decisions in a COVID-19 World
- About Half of Lower-Income Americans Report Household Job or Wage Loss Due to COVID-19
- State Minimum Wages | 2020 Minimum Wage by State
- Minimum Wage, U.S. Department of Labor
- Characteristics of minimum wage workers, 2019
- Quantifying America’s Gender Wage Gap by Race/Ethnicity
- 20 Years of Tuition Growth at National Universities
- Unemployment rates and earnings by educational attainment
- Find MBAs That Lead to Employment, High Salaries