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Raises Falling in California, U.S., 2 Polls Say : Workplace: Studies say pay increases at medium- and large-size companies are shrinking to an average of less than 5%.


For anyone counting on a pay raise, the outlook is grim: Wage increases this year and next will average below 5% at medium-size and large companies in California and across the country, according to a pair of new studies.

One of the studies, a poll of California employers by the management consulting firm William M. Mercer Inc., also found that a growing number of companies anticipate layoffs.

The annual Mercer survey predicted that California workers would receive raises averaging 4.4% this year, down from 4.8% in 1992.

That would be the smallest gain since Mercer started compiling figures in the current form six years ago.

"What we are seeing is a reflection of the recession," Fiona Macdonald, a Mercer compensation consultant, said.

Still, the annual Mercer study--which included 232 California employers with more than 624,000 workers--found some hopeful signs.

In particular, the firm noted that the pay raises should continue to outpace inflation, which is projected at just over 3% this year.

Mercer noted a growing trend among employers to shift health-care expenses to their workers. Almost three-quarters of the California employers surveyed are requiring workers to contribute toward their health benefits, compared to fewer than half three years ago.

Between smaller wage increases and rising consumer health-care costs, workers "are falling behind," Macdonald said.

In another indication of economic worries, 23.6% of the California employers said they expect layoffs this year.

If past trends repeat, the outcome could be worse.

A year ago, 16.6% of employers said they expected layoffs, but by the end of 1992, nearly twice that many actually had made cutbacks.

Separately, the Conference Board, a New York-based business research group, released a survey of 540 companies finding that pay raises for hourly employees will average 4.3% this year and 4.2% next year.

Among executives and other salaried employees, pay raises were projected at 4.5% for this year and 1994.

The projected increases mark a decline from 1992, when hourly workers posted gains of 4.7% and salaried workers received 5% increases.

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