It must be a relief to financial analysts and commentators that they need not continue to qualify the present economic recovery as "jobless." As the specter of job losses fades and prospects for corporate America brighten, how are America's employees feeling?
As part of its recent Economy and Personal Finance poll*, Gallup asked U.S. employees of non-governmental, for-profit companies with five or more employees for their opinions about the firms they work for. Results indicate that there have been some significant improvements in employee perspectives over the past year.
Ratings of Current Financial Situation Peak
Gallup asked employees, "How would you rate your company's financial situation today -- as excellent, good, only fair, or poor?" Results show that employees' opinions of their firms' financial situations have improved over the past 15 months. Eighty-one percent of private-sector employees currently feel that their companies' financial situations are "good" or "excellent," compared with 69% in February 2003 and 77% a year ago in April 2003. The current measurement of 81% is the most positive since Gallup began asking the question in April 2002.
Company Financials: What to Expect
Gallup also asked employees if their companies' financial situations are getting better or getting worse, and there has been a significant uptick over the past year in positive responses. In April 2003, 66% of employees thought their companies' financial situations were getting better. As of April 2004, that percentage has climbed 10 points to 76%.
Job Security, Marked Improvement
With regard to job security, employees have become increasingly more confident since this time last year in their ability to hold on to their jobs. The percentage of employees who are "extremely confident" that they can continue to work for their companies for the next 12 months currently stands at 53%, compared with 40% in April 2003. Again, the percentage of employees who are extremely confident in their job security is the highest since Gallup began asking the question two years ago.
"Show Me the Money"
The number of employees who are either "extremely" or "very" confident that they will get a pay raise from their employers within the next 12 months has remained remarkably stable since Gallup began asking the question in April 2002. As of April 2004, 53% of employees are extremely or very confident in their chances for a raise in the next 12 months -- exactly the same percentage that felt this way two years ago in April 2002. In the interim, the number has ranged between 49% and 56%. More or less, half of all employees can say with some degree of confidence that they are in for a pay raise within the next 12 months.
However, the current data show a slightly higher proportion of private-sector workers who are "extremely confident" they will get a pay raise -- 34%, compared with 29% a year ago, which was the previous high.
Bottom Line
Gallup polling shows that employees at private, for-profit companies are more upbeat about the current state of their companies' financials than they were last year, and they generally think their companies' financial situations are getting better. Employee confidence in job security has also risen.
However, the Bureau of Labor Statistics (BLS) data suggest that all this good news has not yet translated into higher compensation for employees. Employee Cost Indexes released by BLS document the sluggish pace of wage growth in private industry. While some analysts believe that we are climbing out of a trough and the sluggish wage growth trend has bottomed, Gallup data on employee expectations regarding their salaries indicate that we may need to wait and see. It's quite possible that when the BLS releases its Employment Cost Index for the first quarter of 2004 on April 29, the number for Private Industry Wage Growth will disappoint expectations.
*Results are based on telephone interviews with 1,014 national adults, aged 18 and older, conducted April 5-8, 2004. For results based on the total sample of national adults, one can say with 95% confidence that the margin of sampling error is ±3 percentage points.
For results based on the sample of 321 adults who are employed with non-governmental, for-profit companies having five or more employees, one can say with 95% confidence, the maximum margin of sampling error is ±6 percentage points.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
