Great Lakes Wire

As inflation persists, the cost of living is increasing, putting workers under financial pressure. The Monster 2025 Work Watch Report reveals that while 85% of workers anticipate salary increases to offset rising costs, only 11% have received raises matching inflation. This gap between expectation and reality affects many workers who are relying on savings and cutting non-essential expenses.

The report shows that 82% of workers have used their savings for daily expenses, with an additional 8% expecting to do so soon. Many are reducing non-essential purchases (69%), using credit or loans more frequently (43%), and cutting retirement contributions (41%).

Rising living costs influence compensation expectations. While 46% hope for higher wages in 2025, 48% expect to maintain their current salary. This reflects uncertainty among workers amid economic challenges.

A notable disconnect exists between wage growth and inflation. According to the report, "95% of workers report that their current wages have not kept up with the rising cost of living." Only a small percentage – just 11% – have seen raises or salary adjustments accounting for inflation. Many believe they deserve more due to increased living costs (85%), additional responsibilities (44%), or demand for their skills (36%).

Despite these expectations, only "32% of workers have made professional skill advancements in the past year," which may explain the gap between wage demands and actual salary adjustments.

Employers also face challenges. The report states that "30% of employers say that rising salary expectations are straining their bottom line," with "42% acknowledging potential difficulties in recruiting talent due to escalating compensation demands." Balancing fair pay with financial health remains a challenge.

Financial strain influences career choices too. With many struggling financially, "44% have begun looking for higher-paying job opportunities," and "17% have taken on second jobs or part-time work." Higher pay is becoming a primary motivator.

Looking forward, as inflation rises, tension between worker expectations and employer capacity will remain a significant issue. Companies must balance fair compensation with sustainability while workers seek opportunities aligning wages with living costs.

The growing concern over the wage-inflation gap will continue shaping the workforce landscape in 2025 and beyond.

Source: Monster 2025 Work Watch Report

By Heather Nezich, courtesy of SBAM-approved partner ASE.