Inflation Moderates to 3 Percent and Shrinks Worker Raises for 2027

What the Data Shows About 2027 Raises

Two large surveys of over 1,300 companies combined paint a consistent picture of modest salary growth ahead. The Conference Board and Mercer, both respected research organizations, independently landed on the same 3.5 percent figure when polling employers about their raise budgets. That marks no improvement from 2026 and signals that companies are tightening their compensation spending.

The connection between inflation data and salary planning is direct. When inflation peaked above 9 percent in 2022, companies responded with substantial raises to help workers keep pace with rising costs. Now that inflation has moderated to around 3 percent, employer budgets have followed suit. According to Jo Anne Rioli Moeller, a program director at The Conference Board, inflation remains a primary driver of how much money companies allocate for raises each year.

The good news: wage growth has outpaced inflation for most months since 2023, meaning workers’ purchasing power has gradually improved even as raises have shrunk. However, that advantage erodes when overall raise budgets decline as steeply as current projections suggest.

Most Workers Will Not Get a Raise

Perhaps the most striking finding is who actually qualifies for a raise in 2027. On average, only 8.4 percent of a company’s workforce will receive a salary increase, according to Mercer’s research. This represents a sharp departure from 2026, when employers distributed raises more evenly across their staff in what researchers called “peanut butter” raises.

Companies are becoming significantly more selective about compensation. Rather than spreading raise money broadly, employers are now choosing to concentrate increases among workers with specific, high-value skills. This shift means that many full-time employees could see their salaries frozen while their organizations invest in pay bumps for a narrow group of talent.

Artificial Intelligence Is the Raise Winner

If you want to be in that 8.4 percent getting a raise, developing skills in artificial intelligence should be your priority. Roughly 38 percent of employers surveyed by The Conference Board cited AI and machine learning skills as the primary driver of pay increases, topping a list of 17 different competencies by a wide margin.

The second and third most common reasons for raises were people management (30.7 percent of employers) and data analytics (30.4 percent). Workers who can demonstrate expertise in these areas significantly improve their odds of landing a raise in 2027.

The AI premium extends far beyond modest salary bumps. According to separate research from PwC, jobs requiring AI skills offer an average of 62 percent higher pay than comparable roles without such requirements. These AI-focused positions are also growing eight times faster than the overall job market, suggesting that workers investing in this skill set position themselves for both immediate raises and long-term career growth.

What This Means for Your Wallet and Future

For shoppers and consumers, understanding these wage trends matters because they affect household spending power and economic growth. If most workers receive no raise while inflation protection becomes harder to achieve, families may pull back on discretionary purchases or stretch budgets more tightly.

The shift toward AI-driven compensation also highlights a widening skills gap in the workforce. Workers who can upskill in AI, data analytics, or management will likely see improved earning potential, while those without these competencies risk wage stagnation. This divergence could reshape household finances and long-term financial security for millions of American workers.

If you are planning your budget for 2027 or hoping for a raise, the data suggests that waiting for automatic salary growth is risky. Instead, invest time in developing in-demand skills, particularly in artificial intelligence and data analytics. Document how you are using these skills to create value for your employer, and use that evidence during compensation conversations. With only 8.4 percent of workers expected to get raises, positioning yourself as someone with rare, high-demand expertise is your best strategy for beating inflation and securing meaningful pay growth.