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With unemployment at the lowest level in decades, the economy growing, and low inflation, a question has emerged. Why are IT salaries not growing at a faster pace? After all, IT jobs are one of the hottest-employment categories in the U.S.
But as we have seen for every year since the Great Recession (more than 10 years ago), we anticipate only modest upward pressure on IT wages in 2020. Overall, we anticipate that IT workers at the median will receive a pay raise in the neighborhood of 3.0%, as shown in Figure 1 from our full study, Computer Economics IT Salary Report 2020. This represents the same percentage we projected for the previous two years.
Moreover, there are not a great many organizations raising wages more than that 3%. Even organizations at the 75th percentile are budgeting for only a 3% raise—a sign that upward wage pressure generally remains low.
Ordinarily, strong hiring, a surging economy, and a low inflation rate leads to higher salaries, because workers can seek out higher-paying jobs in a competitive market. One respondent to our annual salary survey had a salient take on the market, commenting: “We are having difficulty with retention more than with finding people to fill positions. There are so many open positions that employees can go wherever they want, so retention has been more difficult.”
So, considering all these factors, why are IT salaries only growing so modestly? We examine these reasons in depth in the executive summary of our full study. Here is just a taste of that analysis: