Nearly half of companies plan flat "peanut butter" raises in 2026
Feb 26th 2026
A growing share of U.S. employers are set to hand out low, equal raises in 2026 rather than rewarding merit, a move Payscale links to market conditions last seen after the 2008 recession.
- About 44% of employers plan one uniform across the board raise in 2026 instead of merit based increases.
- About 16% of organizations are newly adopting peanut butter raises, 9% already use them, and 18% are considering them.
- Average salary increase budgets are around 3.5% while nearly a third of companies plan to lower their pay bump budgets this year.
- Employers point to labor instability, restricted pay budgets, and low wage inflation as drivers, mirroring conditions after the 2008 recession.
- Experts warn uniform raises may demotivate top performers and make retention of high talent harder.
- Labor data show 1.1 million layoffs were announced in 2025 and confidence in finding a new job fell to 44.9% in recent Fed data.