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5 Key Reasons Why Not Everyone Will Get A Pay Rise In 2025 (And Who Will See The Biggest Gains)

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The simple answer to whether everyone will get a pay rise in 2025 is a resounding no, but the full picture is far more complex and optimistic for many. As of late 2025, global economic forecasts point to a significant cooling of the labor market and a stabilization of inflation, leading employers to tighten their compensation budgets from the aggressive increases seen in 2023 and 2024. However, this general slowdown masks a dramatic and uneven distribution of wage growth. While the lowest-paid workers are set for mandated, inflation-beating increases, and highly specialized professionals in key sectors will see massive gains, a large swathe of middle-management and white-collar workers may find their raises are barely keeping pace with—or even falling behind—the cost of living.

The global average salary increase is projected to settle around 4.5% in 2025, with inflation stabilizing at a lower 2.6%, suggesting that for the first time in several years, the average worker will experience positive real wage growth. This figure, however, is merely an average. The true story of 2025 is one of widening disparity, driven by legislative action, sector-specific labor shortages, and a fundamental shift in economic priorities away from broad retention efforts toward targeted investment in high-value skills.

2025 Global Salary Increase Forecast: A Snapshot of Nominal and Real Growth

Compensation planning for 2025 is characterized by caution and a return to pre-pandemic fiscal norms, albeit with a persistent focus on retaining top talent. Consulting firms like WTW, Payscale, and WorldatWork have published projections that show a clear deceleration in salary budget increases across major economies.

  • United States (US): US-based employers are budgeting for average pay raises between 3.5% and 3.9% for 2025. This is a slight contraction compared to the actual increases awarded in 2024, signaling that the labor market is cooling and the intense pressure on wages is easing.
  • United Kingdom (UK): The UK market is forecasting average salary increases between 3.9% and 5.0%. However, the UK is projected to see a real salary increase of just 0.4% in 2025, one of the lowest figures among major European countries, highlighting a continued struggle with the cost of living.
  • Euro Area (EU): Negotiated wage growth in the Euro Area is expected to slow significantly to 3.0% in 2025, down from 4.9% in 2024. Despite this slowdown in nominal growth, falling inflation rates mean that many EU workers are seeing substantial increases in their purchasing power.

The key takeaway is that the 'war for talent' has shifted from a broad-based battle to a highly targeted skirmish. Companies are prioritizing affordability and productivity over universal raises.

The "Yes, You Will" Argument: Minimum Wage and Legislative Boosts

The most reliable source of a pay rise in 2025, regardless of sector or performance, is for those earning at the bottom of the pay scale. Legislative action ensures that millions of workers will receive a mandated, non-negotiable nominal increase that is designed to outpace inflation.

1. The Minimum Wage Effect

  • UK National Living Wage (NLW): Effective April 1, 2025, the UK's National Living Wage for individuals aged 21 and over is set to increase to £12.21 per hour. This represents a significant 6.7% rise, guaranteeing a substantial pay boost for the lowest-paid workers.
  • US State and Federal Action: At least 21 US states and the District of Columbia implemented minimum wage increases on January 1, 2025. Furthermore, the minimum wage rate for federal contractors will increase to $17.75 per hour, setting a high benchmark for government-affiliated jobs.
  • EU Minimum Wage Directives: Following landmark court judgments and EU directives, many European countries have implemented substantial minimum wage increases in 2025, in many cases boosting the purchasing power of low-wage earners.

For these workers, the question "Do I get a pay rise?" is definitively answered by law, not by corporate budget planning.

The "Uneven" Argument: High-Demand Sectors vs. Stagnation

Outside of minimum wage jobs, the largest pay increases in 2025 will be concentrated in sectors facing critical labor shortages or those linked directly to productivity gains and technological transformation.

2. The Highest-Growth Industries

Certain industries are projected to see salary budgets that far outstrip the national average, creating a highly competitive environment for specialized talent:

  • Healthcare: This sector is the clear frontrunner. Due to chronic shortages of skilled professionals (e.g., nurses, specialists, epidemiologists), healthcare salaries are projected to rise by an estimated 6% to 9% in 2025.
  • Advanced Manufacturing (Industry 4.0): Driven by reshoring initiatives and the adoption of automation and advanced technology, manufacturing workers are seeing surprisingly strong wage growth, projected at around 4.0% in 2025.
  • Artificial Intelligence (AI) and Cybersecurity: While general tech sector growth is slowing, the demand for specialists in AI, machine learning, and cybersecurity remains exceptionally high. Workers with the ability to manage and work alongside AI systems will command premium salaries, pushing their individual raises well above the average.

3. The "No, Not Everyone" Reality: The Cooling Labor Market

The primary reason most workers will not see the high raises of 2025 is the cooling of the labor market. A combination of rising layoffs and lower employee voluntary turnover means employers are less desperate to offer huge raises to retain or attract talent.

Sectors that are not directly linked to high-growth areas or that are oversupplied with talent are facing significant stagnation:

  • Finance and Business Services: White-collar sectors like finance and general business services are experiencing a "frozen job market." Employees in these areas may receive only a standard merit increase (around 3.0%-3.5%) or less, as the leverage to demand a higher salary has diminished.
  • Executives and Senior Leadership: Paradoxically, some of the highest earners may see the lowest percentage increases. Executive pay is projected to be lower than the general salary structure increase, with some forecasts placing it as low as 2.2% in 2025.
  • Consumer-Driven Sectors: Industries relying heavily on discretionary consumer spending are exercising caution, leading to uneven and often stagnant wage gains compared to productivity-linked sectors.

4. The Real Wage vs. Nominal Wage Disconnect

Even for those receiving a raise, the question of whether it constitutes a *real* pay rise—an increase in purchasing power after accounting for inflation—is critical. While global inflation is stabilizing, local costs, particularly for housing, can negate a nominal increase. The International Labour Organization (ILO) notes that while real wages are growing in virtually all OECD countries, in many places they remain below the levels seen before the post-pandemic inflation surge of 2021.

A 3.5% raise in the US, for example, is a positive nominal increase, but if local inflation for essentials like rent and food is higher, the worker is effectively getting poorer. The true measure of a pay rise in 2025 is not the percentage on the paycheck but the change in disposable income after all bills are paid.

5. The Future of Compensation: Performance and Productivity

The final reason that not everyone will get a raise in 2025 is the renewed focus on individual performance and productivity. Employers are shifting away from blanket cost-of-living adjustments (COLAs) and toward merit-based increases. The average salary structure increase is projected to be lower than the average budget for individual merit increases, a trend indicating that companies are reserving their funds for high-performing employees who can directly impact the bottom line.

This means that simply showing up will not be enough to secure a meaningful raise. Employees must demonstrate tangible value, new skills (especially in areas like data analytics and AI integration), and a direct link between their work and company profit. The era of universal, high-percentage raises is over, replaced by a highly segmented, performance-driven compensation model.

5 Key Reasons Why Not Everyone Will Get a Pay Rise in 2025 (And Who Will See the Biggest Gains)
Does everyone get a pay rise in 2025?
Does everyone get a pay rise in 2025?

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