26 C
New York
Tuesday, May 18, 2021

A rich month for workers, a lean month for many

- Advertisement -
- Advertisement -

When you get in the door of a job, you should hope the seasonal adjustments are on your side. As a rule, the way your job works tends to be different in July — but the size of the spending spike that occurs in the winter? Not so much. That means that some job seekers will suffer the sting of July salary. A growing number of companies are, indeed, keeping salaries flat or falling in July — at least in comparison to the totals they expect to pay in January. The adjustment applies to nonunionized businesses that give raises to non-exempt employees based on their average salary in the same month from the prior year. While an estimated 71 percent of businesses will pay their employees more than this year, most of those will make the adjustment in January. Here’s a closer look at what’s going on. (For a table comparing different departments across various industries, go here.) *An increase in the typical July wage is almost always intended to be a boost to current employees. When companies ratchet up pay for employees in July, the rationale is that they expect a bump in the number of hours employees will work and the level of productivity they will bring to work. In some industries, it will also have positive effects for recruiting; in others, it will be reflected in the hiring decision. It is an all-too-common practice that companies make adjustments to their paychecks for seasonal patterns each year, but this year is the first time that many experts have seen such large year-over-year increases among nonunionized companies. Other experts say the year-over-year adjustments are simply an artifact of July being so close to January. But in some industries, such as transportation and wholesale trade, the mismatch is especially severe. Jason Garner, a labor economist with the University of California, Berkeley, calls it a phenomenon known as “Augusting.” In theory, regular increases in the number of hours worked should be more aligned with the changing pay period in summer — from January to June, compared with January to June in the summer months. “Normally, if you looked at the date distribution of annual hours worked from July to June, those increases would go from a very slight increase in the July hours worked to a much stronger one in the July hours worked,” Garner said. “So you might have a strong upward trend in the July hours worked, but that decline would be more pronounced in the summer hours worked.” The downturn that begins in July can explain a big chunk of the average 2.4 percent annual increase in wages. If we now look at the average amount paid in January compared with the average amount paid in July, then the average monthly increase would be about 1.2 percent. The October survey of employers, conducted by the Economic Policy Institute, noted that there are about 50 major industries with the greatest impact of this year’s adjustment on average annual pay. Of those industries, transportation and warehousing and wholesale trade are among the industries with a high average yearly wage in July, which would help explain why they had the largest average monthly adjustment. (Many manufacturing industries also report strong industry-wide salaries in July, but their average salaries drop in January.) Garner said he believes that companies are delaying a salary increase until after Christmas to avoid having to pay more than usual in January. In this year’s survey, there was a strong year-over-year drop in wages in the mining industry. But, even in areas that have shown a drop in annual wages, they still averaged the highest salaries of the 100 industries with the lowest average wages in the survey. From January to September, the largest average annual wage was 10.4 percent above the lowest average salary, the EPI found.

- Advertisement -

Latest news

Dozens of missiles fired at Gaza in new wave of violence

Gaza: Amid concerns that an attack on the enclave would lead to prolonged bloodletting, Israel is using tanks, artillery and attack helicopters to attack...
- Advertisement -

In Congress, Democrats Press On With Proposal for Russian Election Probe

At an empty U.S. Capitol, a starkly different world, Democrats on Wednesday night pressed forward with a bipartisan proposal to create a task force...

Curtis Fuller, Tenor Saxophonist and Spiritual Voice, Dies at 88

Curtis Fuller, the towering tenor saxophonist who fused deep spiritual wisdom and an artful, rhythmic technique into his work, has died, his friend and...

See Who Re-Released Nicki Minaj’s New Songs in 2018

Nicki Minaj is back with another batch of new music, and it includes a collection of songs with Lil Wayne and Drake. Check out...

Related news

Dozens of missiles fired at Gaza in new wave of violence

Gaza: Amid concerns that an attack on the enclave would lead to prolonged bloodletting, Israel is using tanks, artillery and attack helicopters to attack...

In Congress, Democrats Press On With Proposal for Russian Election Probe

At an empty U.S. Capitol, a starkly different world, Democrats on Wednesday night pressed forward with a bipartisan proposal to create a task force...

Curtis Fuller, Tenor Saxophonist and Spiritual Voice, Dies at 88

Curtis Fuller, the towering tenor saxophonist who fused deep spiritual wisdom and an artful, rhythmic technique into his work, has died, his friend and...

See Who Re-Released Nicki Minaj’s New Songs in 2018

Nicki Minaj is back with another batch of new music, and it includes a collection of songs with Lil Wayne and Drake. Check out...
- Advertisement -