Metro Phoenix Workers May See Big Pay Raises

Originally posted Jul 15, 2013

By John Yantis
The Republic | azcentral.comThu
Jun 20, 2013 10:03 AM


After years without annual pay increases during the recession, some cities and towns are rewarding employees quite handsomely.

Longtime Buckeye workers are poised to get the biggest bump in pay, with their checks increasing by as much as 14 percent under a budget proposal. While proposed raises for workers in other Valley cities and the county aren’t as high, they range from about 2.5 percent in Goodyear to 5 percent for Maricopa County.

The government raises are much larger than what private-sector workers are receiving this year, experts say. While some firms have given raises, many businesses have continued to postpone wage hikes until the economy is stronger, or they have given workers one-time bonuses.

City leaders say the raises are worth it to retain employees who are trained and took on extra job duties during the recession when cities cut workers.

“I completely understand where somebody outside the town would say that (14 percent) seems like a lot, but the employees over the last four years have really sacrificed and have not received pay increases,” Buckeye Councilman Eric Orsborn said.

Like many government entities, Buckeye gives workers two kinds of pay increases. Step increases are merit raises for employees who have moved to the next step on the town’s pay ladder. In Buckeye, a step increase is typically 5 percent.

The increases are given to workers based on performance and time worked. Employees also receive cost-of-living increases, which are smaller and range from 2 to 4 percent.

The fiscal 2014 budget plan for Buckeye contains $3 million to retain employees who have not seen increases in salary steps for five years.

News of the raise comes after employees received a 2.5 percent cost-of-living increase last year. Also last year, the council restored 18-month pay reductions of between 5 and 15 percent that employees were asked to take during the recession.

Buckeye proposal

Under Buckeye’s current proposal, those hired before July 1, 2009, would see a two-step merit increase, which is 10 percent. Those hired before July 1, 2010, would receive a one-step merit increase, or 5 percent.

Employees also would see a 4 percent cost-of-living raise. That number could decrease to 2.75 percent when the council votes on the budget this week, officials said.

Buckeye employees also would be eligible for an additional 5 percent increase on their anniversary date beginning in July unless the employee is already at the top of the salary range.

Because final pay decisions have not been made, it was unknown how many of Buckeye’s employees will receive the largest pay raise, said Nancy Love, human-resources director. The town has 392 full-time equivalent positions.

Other cities

Buckeye employees aren’t the only government workers who expect to see larger paychecks this year:

Maricopa County, one of the Valley’s largest employers, is bringing raises back for the first time in almost six years. Aside from one-time bonuses last year around the holidays, there’s been a freeze on cost-of-living allowances.

County workers will see increases of up to 5 percent. The Maricopa County Board of Supervisors has set aside $58 million in merit-based raises, market adjustments and money to fix salary discrepancies.

Paradise Valley employees will receive merit-based pay increases in the coming year for the first time since fiscal 2009. The increase will represent 3 percent of current year salaries and benefits. They will not get cost-of-living raises. Pay increases will start appearing in many town workers’ paychecks on July 1.

Workers in some Valley cities fared better during the economic downturn. Some cities resumed giving employees raises last year, while others continued to receive pay hikes during the recession.

Phoenix leaders last year approved new employee contracts that brought back half of a 3.2 percent pay and benefit cut that workers took in 2010 when the city faced a general-fund deficit.

The rest won’t be restored until a series of budget goals have been met, including the city meeting revenue targets.

Although all Phoenix workers took a pay cut, the vast majority received merit pay and longevity bonuses throughout the recession. The increases average to 4.8 percent per year.

Public vs. private sector

Larger companies and municipalities feel more confident in giving employee raises, because there are pockets of significant growth and development around the United States, including the Phoenix area, said Michael Seaver, of Seaver Consulting LLC of Phoenix.

“In order to keep talent, or attract really talented folks, they’ve got to find not only wage increases but alternative compensation methods, whether it’s extra benefits and bonuses or flexible schedules that are really going to attract and keep the younger generation,” Seaver said.

Yet, in the private sector, many business owners are still nervous about the economy and are not giving employees wage increases, said Camille French, western region vice president of Tilson HR, a company that handles employee administrative functions for business owners.

“What I see a lot of my clients doing is giving bonuses,” she said, adding that most are between 4 and 5 percent and are meant so companies don’t have to burden their annual ongoing labor costs.

Some employees in private business can expect pay increases of about 3 percent annually, said Seaver,who teaches entrepreneurship and human-resources classes at Grand Canyon University.

Wage increases and money for employee training and development virtually dried up during the recession except for in a few select companies and industries, Seaver said.

“A lot of the focus ended up shifting back onto the individual to find other methods of income but also foster their own growth and development without the company’s help,” Seaver said.

Republic reporters Gary Nelson, Dustin Gardiner, Jackee Coe, Michelle Ye Hee Lee, Philip Haldiman, Beth Duckett and Michelle Mitchell contributed to this article.