Almost half of US workers getting bigger paychecks this Christmas
Expert recommends using extra cash to pad emergency savings, pay down debt
For almost half of American workers, 2019 was a rainmaker.
Roughly 28 percent of employees earned a pay raise, while 12 percent landed a better-paying job and about 10 percent did both, according to Bankrate’s December Financial Security Poll. The combined growth was significantly higher than the 38 percent gain the year before and marked the largest expansion since 2016.
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“Low unemployment and a tight labor market with more than 1 million open, unfilled jobs is benefiting workers, with more reporting pay raises and finding better-paying jobs than each of the last three years,” said Greg McBride, Bankrate's chief financial analyst.
The financial gains weren't spread evenly across the workforce, however, according to findings that the New York-based consumer financial services company gathered from 1,000 interviews conducted from Nov. 25 to Dec. 1. Lower-earning workers were less likely to land a raise than high-income counterparts.
Roughly 55 percent of employees who earn $50,000 or more annually saw a boost in pay, while just 43 percent of workers earning less than $50,000 brought home a bigger check.
The smaller the paycheck, in fact, the gloomier the odds of a raise. Nearly two-thirds of employees earning less than $30,000 a year received no increase, according to the findings.
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Education, meanwhile, made a noticeable difference: Some 56 percent of college graduates are making more than a year ago. Only about 45 percent of workers without a degree are doing so.
“The ability to earn more money can be a much-needed boost to the finances of many Americans, if properly deployed. Padding emergency savings, increasing retirement contributions and paying down debt are all prudent moves to make with the additional money in the paycheck.”
The pay growth reflects a thriving labor market. In November, employers added 266,000 jobs, the most since January, and unemployment returned to a half-century low, a sign the U.S. is powering through the global slowdown.
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Monthly payroll gains averaged 205,000 for the past three months, up from a recent low of 135,000 in July. Steady job growth has helped reassure consumers that the economy is expanding and that their jobs and incomes are secure, which should boost spending and growth
According to the newly-released report from Bankrate, 30 percent of workers indicated increased confidence in the job market over the past 12 months. By contrast, 12 percent showed decreased confidence and 58 percent were unchanged.
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FOX Business' Megan Henney and the Associated Press contributed to this report.