Rising tide likely won’t lift salaries

NEW YORK — If you thought an improving economy was going to get you a bigger raise this year, guess again.

U.S. businesses are, on average, increasing their salary budgets by 3.5 percent for 2004, the same level as last year’s forecast, according to a new survey from private research group the Conference Board released Wednesday.

If the 2004 gain comes to pass, it would mark the second time in 11 years that salaries advanced under the 4 percent mark. The expected salary gains for 2005 are also expected to come in below 4 percent too, the report said.

“Although U.S. business continues to rebound from the economic downturn, companies are still paying close attention to cost control,” said Charles Peck, who headed the salary survey for the Conference Board.

The 3.5 percent average salary gains for the current year extend across the spectrum of positions, from executives on downward. The predicted gains were fairly consistent in various lines of business too, with insurance industry workers doing a little bit better than the overall average, and utility workers doing the worst on a relative basis.

The good news, the group said, is that salaried employees will nonetheless make some headway, as inflation is likely to come in under the rate of salary gains.

The Conference Board said it’s projecting a 2.2 percent increase in inflation for 2004, although it expects to see a 2.7 percent increase over next year, suggesting a smaller real advance in salary for 2005. In May, overall inflation versus a year ago stood at 3.1 percent.