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October 30, 2009

Outlook for paychecks

Probably the two most important economic factors for most people are whether they have a job and if so, what they get paid. Let's focus on the second factor today. What are economists seeing in the prospects for pay and pay increases next year? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, first of all, pay, as you might expect, has not been changing very much this year. In fact, nationally on average, it's gone up somewhere between 1 and 2 percent, which is not much when you factor in inflation. Economists are somewhat divided on what they see for pay for 2010. Typically, if we assume that 2010 is going to be a year of economic recovery, economic growth, typically if we look at past recessions and recoveries, pay does take jump after a recession as the job market solidifies and businesses are competing more for good workers. But this time around may be different because many economists continue to see unemployment being a big problem, big issue in 2010, nationally, perhaps staying above 8.5 percent, maybe even a little higher here in North Carolina. So the bottom line is that many economists think that we're going to see very little progress, if you will, on pay, very little increase in pay in 2010. Another reason being, workers, because the unemployment rate going to be so high are going to be willing to take less just to have a job."

Posted by Dave at October 30, 2009 08:00 AM