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Russian (RU) Nearly 7 in 10 workers believe they’re underpaid, even when their compensation is at or above market rates, according to a new Payscale report.
That’s a leap from the 51% of employees earning at or above market who felt underpaid four years ago.
“Employee expectations around pay remain elevated, fueled by both expectations of pay fairness and anxiety about inflation and cost of living,” Lexi Clarke, Payscale’s chief people officer, told Yahoo Finance. “Workers feel underpaid, but it’s more nuanced than just inflation.”
Read more: 5 ways to break the paycheck-to-paycheck cycle
Payscale’s report found that wage growth has cumulatively outpaced inflation across most sectors since 2019, but workers don’t always perceive that progress, she said.
This disconnect exists even though 1 in 3 US employees are now covered by pay transparency regulations. According to Indeed, 6 in 10 job postings in the US included salary information.
“Being transparent about compensation can strengthen trust with both current staff and potential hires, enhance an employer’s competitive edge, and make it easier to draw in new talent,” Indeed career expert Priya Rathod said.
It certainly can’t hurt. But for some reason, even knowing a range of what their employer is paying for their role doesn’t seem to be sinking in for many workers. They still believe they're being paid unfairly for the work they do.
There’s also a cultural shift happening with many workers. Employees today don’t just want numbers; they want context, Clarke said. “They want to know how their work contributes to the business, how performance is rewarded, and how they can grow financially within their role or company. Without that narrative, even competitive pay can feel opaque or unfair.”
To add fuel to the fire of discontent, many salaried workers won’t see raises this year. The number of organizations planning to give base pay bumps this year dipped — 6% of employers say they’re cutting pay increases entirely, and roughly 2 in 10 are scaling back raises, according to Payscale data.
Those companies who are doling out raises say they will hike salaries by an average of 3.5% this year, compared to 3.8% in 2024 and 4.8% in 2023 — which was the highest level in two decades.
Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky.
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