More workers call wages inadequate, survey finds

But 50% of employers think pay is competitive


CHICAGO -- The average worker hasn't seen a meaningful pay increase in three years, despite the economy's rebound, according to U.S. Labor Department data.

That may explain the findings of a national survey released yesterday reporting a sharp increase in the number of employees who feel underpaid.

Nearly 40 percent of employees think their companies pay less-than-market-rate salaries, compared with 28 percent last year, according to the annual survey of workplace attitudes conducted for Randstad North America LP, a national employment services company with headquarters in Atlanta.

Yet a growing number of employers - 50 percent this year compared with 42 percent in 2005 - believed the salaries are competitive with the market rates, the survey found.

The survey was conducted in February and March by Harris Interactive Inc. The survey involved an online panel of about 1,600 employees and nearly 1,300 employers.

The growing disconnect between workers and bosses occurred as fewer employees reported being satisfied with their workloads and hours.

That pressure contributes to feeling underpaid, said Eric Buntin, Randstad's managing director of marketing and operations.

"Employers pretty much think their salaries are competitive in the marketplace and they may be," he said. "But pay may not be keeping up with the increasing costs we've been experiencing, especially in the last six months with dramatically higher gas prices.

"The productivity gains employers and employees agree are so important may not be translating into [higher] wages," he added.

Real wages for most private sector employees peaked in mid-2003, according data of the U.S. Bureau of Labor Statistics.

Declines in real pay have moderated in recent months as the job market has tightened. Even so, the average worker's hourly pay in May was $16.62, down 1.7 percent from the inflation-adjusted rate of $16.90 per hour in June 2003, bureau data show.

Randstad's survey found marked differences in how various generations view pay compared with other aspects of career development. Pay increases grow in importance the older the worker gets.

Generation Y, defined by Randstad as people who were born between 1980 and 1987, is the least interested in pay increases. Learning new skills is most important to this youngest generation of workers; 31 percent ranked learning new skills as "extremely" or "very" important, while 27 percent said pay increases were paramount.

And 19 percent - more than any other generation - valued a career path, yet only 3 percent consider increased responsibilities very important.

Companies can't assume the way they have approached career development in the past will work for this generation, Buntin said.

"Most employees understand the way to increase their pay is moving into a new [more responsible] position," he said. "Generation Y wants skills and opportunities but not more responsibility. This generation may redefine career development."

But as members of Generation Y age, they may become more like their parents and grandparents.

Pay increases top the list of what employees of all ages value most, followed by learning new skills and increased responsibilities.

And a majority of employees of all ages said they would endure more stress for more income.

Barbara Rose writes for the Chicago Tribune.

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