By Bruce Crumley, Inc. (TNS)
Business owners facing employee requests for higher pay have plenty of reasons why they can’t increase salaries over current levels, and a new survey suggests another one. They may not be making enough money to feel financially secure themselves. A new poll shows that people across a wide range of revenue levels believe they need far higher incomes to feel financially secure—considerably more than businesses could possibly pay them. In fact, a majority of respondents themselves consider ever reaching their quantified comfort zones as unlikely or impossible.
That gap between perceived security and realistic expectations is one of the main findings in the 2024 Financial Freedom Survey by Bankrate, a consumer finance services company. It reflects the serious strains that post-pandemic inflation levels as high as 21 percent have had on people’s hearts, minds, and wallets—and how much they think they need to earn, as employees to feel financially secure. That pay threshold ranges from $171,000 to $282,000, with the average salary sweet spot clocking in at a lofty $186,000.
And don’t even ask what people would need to feel rich (a warning Bankrate brazenly ignored.) Responses spanned annual salaries of $461,000 to $621,000, averaging out at an ambitious $520,000. That’s over 6.5 times the 2022 mean annual U.S. income of $79,000 calculated by the Census Bureau, though it’s still a modest number in an age where CEOs like Elon Musk and Salesforce’s Marc Benioff pull down tens of billions of dollars each year.
Many respondents remained grim about their prospects for ever making that much money, as 30 percent said they were “not completely financially secure and likely will never be”—up from 26 percent in 2023. A total of 75 percent said they didn’t feel that safety with their current incomes, a rise from 72 percent last year,
Meanwhile, evidence that optimism wanes with age played out in the responses, as Gen Zers led the respondent groups who believe they will one day reach their desired salary levels. A full at 64 percent of people age 15-24 said yes, but that confidence decreased sequentially by generational cohort, as only 26 percent of baby boomers expected the same.
Boomers were also among the top three groups believing they’d never attain financial security at 42 percent, along with 39 percent of parents whose children are 18 years of age or older, and 43 percent of Americans making under $50,000—a 7 percent jump over 2023.
Rising estimations of what people consider comfortable incomes are largely driven by inflation, which the Federal Reserve says put consumers under “increasing strains as they attempted to meet higher living costs, after having largely run down savings accumulated during the pandemic.”
Bankrate senior economic analyst Mark Hamrick agrees inflation factors heavily into changing perceptions in the 2024 survey results—attitudes on full display for retailers, restaurants, and other client-facing businesses as consumers scale back spending.
“Many Americans are stuck somewhere between continued sticker shock from elevated prices, a lack of income gains, and a feeling that their hopes and dreams are out of touch with their financial capabilities,” Hamrick says, noting perceptions—and fears—may shift back as inflation calms. “If prices continue to normalize and the job market remains stable, further progress can be clawed back on the affordability front.”
That still won’t permit most employers to meet employees’ anxiety-driven salary aspirations. But in addition to the budget-busting levels that would bring perceptions of security, companies have another reason to keep pay levels steady—the proven role rising pay plays in fueling inflation that most consumers cite as their biggest concern.
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(c) 2024 Mansueto Ventures LLC; Distributed by Tribune Content Agency LLC.
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