Modest 2027 wage hikes may leave many workers trailing inflation
A survey of 1,000 U.S. firms predicts average salary growth of 3.5% in 2027, which could fall short of rising consumer prices for many employees.
According to a Marsh survey of 1,000 U.S. organizations, the average salary increase slated for 2027 will be about 3.5%, encompassing merit raises, cost-of-living adjustments, promotions and other pay moves. Marsh compensation specialist Mark Bowling said 2023 marked the peak of wage growth and that the current outlook may represent a new budgeting norm. While many employers have not yet locked in their compensation plans, the modest uplift could leave a portion of the workforce barely keeping up with consumer-price gains.
Firms are expected to allocate limited raise budgets strategically, favoring high-performers and roles tied to retention and business priorities, rather than spreading modest hikes evenly. Sectors such as high-tech and banking are projected to see slightly higher averages—3.8% and 3.7%—whereas industries with lower wage bases, like retail, may receive increases that lag inflation.
Why it matters
Workers could see real wages stagnate if modest raises fail to outpace inflation.
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