My DH was informed by his company that this year no one would be getting raises. A promotion was possible but no raises. Instead everyone would be getting a very large bonus. The bonus would be an extra 4% which would typically be the cost of living raise given out. But instead of increasing people’s salaries, the company preferred to keep everyone frozen and just give out a lump sum in February.
However they wanted to let people know in December so people don’t think that they were doing poorly. Actually the company is doing well, but as a precautionary measure they were going to give out bigger bonuses as incentives instead of a raise. Basically the company is trying to keep costs long term at a minimum. This will hurt people because while they get the money it’s in the form of a bonus instead of salary and thus if they look for another job it will look like they were getting less money when they got more with the bonus.
Since 2005 my DH and I salaries have sort of stagnated. Part of it was my DH’s fault and part of it was circumstances. In 2005 my DH got laid off after working 8 weeks. Then he found a new job in January 2006 but it was the same salary obviously. He got a raise of 3% in 2007 and a very small bonus because it was a terrible year. But he ended up leaving in June 2007 for another company. Again the same salary but more responsibility and potential for growth. Unfortunately in February 2008 he got a 1.5% raise or 50% of a 3% COLA and minimal bonus because of the jump.
Thus this year he’s hoping for a promotion and a substantial raise. The chances are good which will make our salaries finally bump up. I’ve gone from $27k to $27.5k to $28k and I’m not sure what the future holds. But I can definitely understand why from 2005 to 2009 (almost) it’s felt like our standard of living has decreased. It really has because our salaries while nice, haven’t kept pace with inflation. But I doubt we’re alone in this situation. We’ve been trying to cut our expense with coupons, conserving, driving less, grocery list shopping and meal planning. Yet with the rapid increase in prices of food, gas, heating, electricity it really just disappeared.
Right now like my DH and his coworkers were talking amongst themselves, they are just happy to have jobs with no rumors of layoffs. Multiple companies in the field is having layoffs and now is not a time to be whining about a lack of a raise.
What’s going on with your company? Wil you be getting raises/bonuses? Or will it be tighter than usual?
25 responses so far ↓
1 Sarah // Dec 16, 2008 at 9:44 am
We are having not only a salary freeze, but we are having a hiring freeze too. For the next year all positions that get posted have to be filled internally, and most departments actually have to cut positions (except for the ones that they post to have filled). I put in my resume for a job that I am not quite qualified for in the hopes that I would have a decent shot since its all internal. No bonuses here either – we got a $25 Visa card for Christmas. Yippie….
2 Middle Way // Dec 16, 2008 at 9:54 am
I don’t get bonuses as I am self employed. I guess I could give myself a raise but I haven’t for a while.
My biggest issue is with rent. I pay a lot and for the last last 5 years, it has steadily and significantly creeped up. So you can say that I’ve had a salary cut for 5 yrs in a row.
I am getting to the point where I may have to make a decision to move my business elsewhere if it keeps going up.
3 lisa // Dec 16, 2008 at 11:35 am
None of the office help has recvd raises where I work for 3 years now.
So with everything else going up and salary staying the same, my budget looks like I have had a pay cut each year.
4 FruWiki Meg // Dec 16, 2008 at 12:10 pm
The company my husband works for is definitely tightening up their purse strings — and hopefully not too late. It’s survival mode, plain and simple. They even laid off a good friend who’ll now be moving in with us. My husband and I broke the bad news to her together. I can’t describe how hard that was to do.
So, no, we’re not expecting a raise for him. At this point, we’d rather have the company last a little longer anyhow. Until now raises and promotions were pretty generous so we’ve more than kept up with inflation, especially has we’ve done many things to lower our costs.
5 Revanche // Dec 16, 2008 at 12:15 pm
No raises, and in fact, I think no jobs, soon! It’s not been announced officially but I know we’re all getting laid off next year. It’s just a matter of time: between a week to six months.
6 Kristy // Dec 16, 2008 at 1:29 pm
DH received a 7.5% raise and a 17% bonus. But he works in the liquor industry where people drink in good times and in bad. He has always received a pretty good raise and awesome bonuses.
I work on commission, so no raises for me…or bonuses this year either!
7 TStrump // Dec 16, 2008 at 1:37 pm
I am actually self employed so if I want a ‘raise’ I have to increase my contract rate.
I also feel that my standard of living as gone down. Prices have gotten crazy in everything but my income hasn’t increased at the same rate.
For example, real estate prices have more than doubled since 1997, but my income hasn’t.
8 Angie // Dec 16, 2008 at 4:57 pm
We have fired all part-time employees and were told that we won’t be getting raises in the first quarter. Things will be re-evaluated for the second quarter. No work on our yearly profit-sharing bonus. And at the same time they told that they’re taking these precautions even though we’ve had record sales and just purchased a company.
Today we were also told that we will be closed Jan. 2 and we can either use a vacation day for it or take voluntary time off.
We just renewed our insurance plans, and of course that went up, so our take home pay is actually less.
And my husband hasn’t gotten a raise in almost two years, though he’s asked for one multiple times.
Times are tough everywhere.
9 LAL // Dec 16, 2008 at 5:24 pm
Sarah there is a hiring freeze at DH’s work for almost 14 months now! Since October 2007.
MiddleWay I can definitely see how rents are increasing but it’s hard to raise costs to the consumer who might decide to do without.
Lisa, us too! Paycuts since 2005.
Revanche, I’m sorry to hear about the layoffs.
Meg, I hope that your husband can keep his job. Why is your friend still moving in without a job?
Kristy, does that mean your husband is going to get a raise and bonus?
Tstrump, I read of a stay at home mom cleaning homes for extra money who was recently “let go” from 3 jobs. She said that obviously people aren’t paying for cleaning anymore.
Angie, I hadn’t even considered the fact that more of our medical premiums we have to pay.
10 Tim // Dec 16, 2008 at 5:29 pm
we’re sitting pretty well, and I feel we are a bit counter to the economy and job market as a whole. my wife got a 42% raise 3 months ago. She will get at least another 25% raise (up to 35%) at the end of the month. I’m the drag on our family and will get only 20% raise (i say this sarcastically knowing it is significant). My wife’s raises were contingent upon certain gates to be met, which would lead up to her real salary that she was hired at, so although it looks like a lot (don’t get me wrong it still is), now that she has met her gates, her salary will be pretty much fixed for the foreseeable future, although it could fluctuate another 10-15%. With that, though, her position is a hard fill position with limited qualified personnel and recession-proof, so her job is very secure (knock on wood). For me, my raise is based off a promotion I just received.
11 FruWiki Meg // Dec 16, 2008 at 5:31 pm
@LAL,
Well, simply put, our rent is cheap and we’re among the few people she’d ever consider living with.
We’re not worried about her not paying if that’s your concern. She always lands on her feet because she’s such a hardworking gal — though we’d be the first to loan her money if anything did happen. We’ve helped each other out plenty of times and are very close.
I’m looking forward to it, even though we’ll miss our current roommate who is moving out and — ironically — into our other friend’s subleased apartment.
12 Fabulously Broke // Dec 16, 2008 at 6:43 pm
No raise in my company either (seeing as I own it)…
But I never had a raise in the 2.5 years I worked for a corporation so *shrug* I don’t expect bonuses or raises when I work for a company.
13 Kristy // Dec 16, 2008 at 7:41 pm
Yes, that is what he received this year as his bonus and raise. He received something similar last year.
14 fengshui // Dec 17, 2008 at 1:36 am
Healthcare providers don’t recieve bonuses so I’ve never expected one in my career. We all just got 3% raises for “COL”…. less than raises in the past. DH works for his family so I think that he may get an x-mas bonus, but no raise…..
I am thankful that we have good jobs and good benefits. Many people are having their benefits cut.
15 LAL // Dec 17, 2008 at 9:42 am
Sorry I wasn’t sure if you were talking about last year and expecting the same this year or not.
I guess the thing is you get the same money but it’s not guaranteed. ouch.
And yep fengshui I’m happy to have a job right now, more companies are laying off people.
16 Barb1954 // Dec 17, 2008 at 4:54 pm
Be happy to have a job is the sentiment that most people should have this year. My “raise” is the notice in the mail I received today that my unemployed has been extended. My husband has a contract at a set amount (no raises in 3-1/2 years), but his sales commmission is determined by how much he sells each year and a percentage of sales. I’m not sure if it will be as high as last year (about half as much as his base pay), but the year’s not over yet.
17 LivingAlmostLarge // Dec 17, 2008 at 9:22 pm
Barb do you have any idea of his sales commission? Or is it a surprise?
18 Barb1954 // Dec 18, 2008 at 1:16 am
Only up through September. After the fourth quarter sales are finalized they’ll send him a print out with the number.
19 Barb1954 // Dec 18, 2008 at 1:17 am
p.s. Let’s up it this way, for the last two years, his sales commission was $10,000 more than I earned when I was working.
20 LivingAlmostLarge // Dec 18, 2008 at 9:10 am
That’s great at least you can plan for it!
21 Barb1954 // Dec 18, 2008 at 12:20 pm
Not really. One never knows what customers will do, whether the plant will screw up an order, how soon a deal will close, etc. etc. So many things can go wrong with timing and the economy that all DH has any control over is how hard he works, and even then others can screw things up.
The last two years we used his net commission to fund our Roth IRAs and put the rest into savings (paid for the new roof on our house this fall). Considering that we lost so much in our retirement accounts this year, we’re now thinking of taking a huge chunk of his commission (at least $10,000) and prepaying the principal on our mortgage. We only have 5-1/2 years to go until it’s paid off, but we’d like to speed that up. We also expect an inheritance from DH’s dad in the next year and we’re considering using that to pay off our house entirely.
22 LAL // Dec 18, 2008 at 4:18 pm
Sounds like a good plan. How do you pay taxes on the commission? Do you have extra withheld?
23 Barb1954 // Dec 18, 2008 at 4:33 pm
It’s just like a regular paycheck, just a much larger gross. So Federal and state incomes taxes are withhold, along with FICA and 401(k) deductions. So we usually only up with half of the gross.
24 LAL // Dec 18, 2008 at 4:52 pm
I am guessing that we have to do that with the bonus this year because it’s like a raise but it’s a lump sum so we don’t want too much withheld.
I know the lump sum is better but it just doesn’t feel the same.
Your job or your salary? - Jan 20, 2009
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