Dive Brief:
- About 55% of U.S. workers whose pay dropped during the pandemic said their compensation hasn’t returned to normal levels, according to the results of a February survey from Elements Global Services.
- Nearly two-thirds of U.S. respondents said their income stayed the same or decreased in 2020. For those who reported decreased compensation, 39% said they took a pay cut, 29% said they lost their job, 24% said their income varies and 8% said they took a new job with lower pay.
- Despite a lagging rebound, most respondents were optimistic about their financial futures. Of the more than 2,200 respondents from the U.S., Canada and the U.K., half said they expect to bring in more money than last year and 30% said they think they will make about the same.
Dive Insight:
As employers reacted to the emerging COVID-19 crisis last spring, pay cuts proved a common strategy. An April 2020 analysis of Securities and Exchange Commission filings by Gallagher showed that public companies were more likely to execute pay reductions than layoffs.
But a glance at employment data from the U.S. Bureau of Labor Statistics demonstrates how prevalent job loss became during the early months of the pandemic. By April 2020, the unemployment rate surged to 14.7%, up from 4.4% the previous month.
U.S. workers had lost some $1.3 trillion in annualized income due to the pandemic by May 2020, according to a report from the Society of Human Resource Management and Oxford Economics. That same month, survey results from Strada Education Network suggested that a third of workers who had lost a job, income or hours due to COVID-19 had started a new job. And while the national unemployment rate sunk to 6% last month, research has suggested that, for many employers, the pandemic disrupted salary increase plans for 2021.
