For some employees, regular raises are one big perk of working in corporate America. In fact, the average base pay increase in the U.S. in 2027 is expected to be around 3.5%, which is just a bit higher than the actual 3.4% average pay increase employees received in 2026. While salary bumps help workers maintain their buying power as prices increase naturally over time, the vast majority of raises are more than mere cost-of-living adjustments, with 89% of pay increases offered due to merit.
Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake. Here's what it is and 3 simple steps to fix it ASAP The tax breaks in Trump's 'big beautiful bill' expire after 2028. Here are 4 moves to make before the window closes Unfortunately, far too many workers aren't aggressive about negotiating their salary, as 57% of employees admit they've never asked for a pay increase.
This can leave workers falling behind, especially the most loyal ones in high-paying positions. In fact, among workers earning $125,000 or more, 30% of tenured employees end up making less than newer coworkers. This is exactly the situation Joe is facing.
Let's pretend Joe worked for the same company for eight years. He's received good reviews and modest pay increases totaling $2,600 over that time. But now Joe discovered that his coworker Tim quit, but was lured back with a $15,000 pay increase.
This news has Joe wondering if he must leave for the company to know his worth. So, should Joe quit, or is there a different approach to take? While Joe is naturally upset, he's likely looking at the wrong metric.
"Comparing your situation to your colleague isn't going to help here," Sara Brioschi, PeopleTopics founder, told Moneywise. "The information about pay matters, but it's not your identical reference point. Your colleague could be in a position that's more challenging to replace, or they could be high performers, or the company could be just buying time to find a replacement." Instead of focusing on what your colleague earned, experts recommend that Joe look inward.
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