New year, new pay rise… but don’t get too excited.
While you might think your yearly incremental pay rise can only be a good thing, think again. That’s because, according to a new global report by consulting firm Korn Ferry, U.S. workers can expect only a very moderate increase in salary in 2026.
In the latest Korn Ferry Total Rewards Pulse Survey, 44 percent of leaders said their organizations will provide increases to at least 95 percent of employees, with only 1 percent of firms handing out none.
5 jobs hiring across the U.S.
- Policy Counsel, ACLU of New Hampshire, Concord
- Research Associates, J.L. Partners, New York
- Police Crime Analyst, City of Danville, VA, Danville
- Policy Associate, LHH, Tulsa
- Government Programs Policy Specialist, Innova, New York
However, the average estimated raises are lower, in some cases, far lower, than what companies had been paying previously. Additionally, they’re tying pay rise figures to projected market salary increments rather than to real increases in the cost of living.
In real terms, this equates to a 3.5 percent raise in 2026, just slightly ahead of the current rate of U.S. inflation, which stands at 2.9 percent. Median wages and salaries increased 3.9 percent and 5.1 percent, respectively, for the twelve-month periods ending in June 2025 and June 2024.
By comparison, some industries were paying out raises of 10 percent or higher to attract or retain select workers after the pandemic.
Not adding up
So why the disconnect? “Base-pay increases are set relative to the cost of labor, not cost-of-living or inflation increases,” says Tom McMullen, leader of Korn Ferry’s North America Total Rewards expertise group.
This is despite many American workers struggling to live paycheck to paycheck. In a previous Korn Ferry survey of workers, 70 percent said they were worried the cost of living was outpacing their current salary. Meanwhile, 35 percent believed they were being paid below the value of their skills.
Survival debt
Similarly, a new survey by Zety found that inflation is forcing many Americans to borrow just to get by.
The survey of 1,005 U.S. employees found that more than half (56 percent) say their salary isn’t enough to both manage debt and contribute to future savings, while 48 percent have relied on debt in the past year to pay for essentials like groceries and utilities.
The survey also found that the most common form of debt is credit cards (71 percent) and 21 percent can only make minimum payments on their debt. Another 9 percent admitted they can’t even meet minimum payments every month and only 27 percent are in the position to aggressively pay off their debt every month to get rid of it quickly.
Even more sobering is the fact that because such a significant number of workers are getting into significant debt just to get by, 22 percent are delaying saving for retirement, 10 percent have skipped necessary medical care and prescription and 16 percent have given up on the idea of ever purchasing a home.
“What stands out in these findings is how pervasive financial strain has become. Employees are juggling multiple debts while trying to cover day-to-day expenses, a pattern we call ‘survival debt.’ This kind of borrowing often comes at the expense of important life milestones—buying a home, saving for retirement, or investing in their careers,” says Jasmine Escalera, career expert for Zety. “These are choices no one should have to make lightly, and they illustrate just how much economic pressures are influencing workers’ decisions and outlooks.”
Without structural changes to wages or financial support, it’s becoming increasingly more difficult to break the cycle of getting into debt.
However, if taking matters into your own hands is on your 2026 radar, one option is to start thinking about looking for a new job now.
As part of its report, Korn Ferry found that 76 percent of organisations expect head count stability in 2026, with most leaning towards modest hiring increases. Additionally, 88 percent of organisations anticipate revenue growth in 2026, with 52 of that number expecting growth of 6 percent or more.
