While bonuses can be attractive to employees, they don’t offer the long-term benefits that salary raises do. Many companies have opted to give out bonuses instead of raises, but bonuses are often temporary and can be taxed at a higher rate. A raise, on the other hand, provides consistent benefits over time, impacting factors such as Social Security contributions, retirement benefits, and future wage negotiations.
Key Points:
- Bonuses, though sometimes generous, are not permanent changes to compensation and can be taken away easily.
- A raise in salary can positively affect Social Security and retirement benefits, and helps with wage negotiations in future jobs.
- Bonuses might seem appealing, but they might not always be beneficial for companies in the long run, especially regarding employee retention.
- The current strong labor market offers employees an advantage in negotiations, making it an ideal time to push for raises instead of one-time bonuses.
- Workers should consider organizing or joining unions to better advocate for consistent raises rather than sporadic bonuses.
Source: https://www.vox.com/money/23851170/bonus-raise-job-market-work-money
