Maryland?s strong economy should help boost average raises above 4 percent and closer to 5 percent, local economic experts said.
Companies are expected to offer employees raises on average of about 3.5 percent, despite the threat of continued inflation, according to a report by The Conference Board, a nonprofit business research organization. That?s slightly better than the 3.1 percent rise in inflation for 2006 and the 3.3 percent rise in inflation in 2007 that the board predicts.
However, corporate executives are expected to fair better, with raises averaging about 3.8 percent, the board said.
“Moderate inflation has allowed employers to continue to control payroll costs,” said Charles Peck, compensation specialist at The Conference Board.
The raises marked the fourth consecutive year that employee raises have been less than 4 percent.
But not so for Maryland workers, particularly those blessed with high-demand jobs, said John Hopkins, assistant director for applied economics at RESI Research and Consulting at Towson University.
“One of the hallmarks of Maryland and the Baltimore region is the high quality of jobs,” Hopkins said.
Hopkins added that biotech and high-tech jobs remain in high demand among Maryland and Baltimore-area employers and thus wage increases for existing workers should be above the national average.
Richard Clinch, director of economic research at the Jacob France Institute at the University of Baltimore, said Maryland and the Baltimore region ? for the most part ? escaped the 2001 nationwide economic downturn and many skilled jobs are going unfilled.
“Worker scarcity is becoming a constraint for employers,” Clinch said. “We should have wage increases in the 4.5 [percent] to 5 percent range. But I?m not talking about the average worker. The wage gains will go to highly skilled workers.”
He said low-skilled jobs will see minimum salary improvements. Clinch said the cost-of-living ? particularly housing and energy costs ? are high in the state but that mostly affects workers moving to Maryland.
Manufacturing jobs, while important to the state economy, aren?t the driving force for wage increases ? indeed, many Maryland manufacturing jobs have disappeared since 1991, Clinch said.
