Raises Not a Reality in NJ [AUDIO]
The economy continues to slowly improve, but most Garden State workers won’t be getting a raise anytime soon.
So why is this happening?
“Constrained pay raises I think are going to be the new normal, the global economy is putting tremendous pressure on the U.S. economy, and the years of very generous pay raises are past,” said James Hughes, dean of the Edward J. Bloustein School of Planing and Public Policy at Rutgers University.
Hughes said another important factor is that in many cases “health care benefits being provided to workers are very, very expensive and so to some degree there’s a tradeoff between pay raises and very expensive health coverage.”
He said the end result is tremendous pressure on household consumers because their buying power is not growing.
“They’re still working off debt that they accumulated during the past decade. So we are really are looking at an era of the squeezed consumer,” said Hughes.
Hughes said this new reality is inhibiting the economy, but he doesn’t think it will put the economy in trouble. “The patterns of consumption over the past two years haven’t been that bad, we’re just not going to see that over-consumption that we saw during the bubble years.”