Nearly half of companies are turning to poor ‘peanut butter’ raises—following the same pattern of the 2008 recession, an expert says. And it could take years to recover

Workers eagerly awaiting big pay hikes after their stellar performance reviews are in for a rude awakening: Instead of rewarding employees based on merit, many bosses will be dishing out flat and low “peanut butter” raises spread to all staffers in 2026. And worryingly, it’s a trend that last emerged during a perilous economic time in history. 

“It’s a term that’s gone quite viral at the moment, but it’s not a new phenomenon,” Ruth Thomas, chief compensation strategist at Payscale, tells Fortune. “Peanut butter pay increases tend to come into play when you are in an environment of economic volatility and low wage inflation. The last time we really saw this was post the Great Recession, after the financial crisis in 2008 [and] 2009.”

During that dark period for the housing and job markets, Thomas says that pay budget increases were stuck at about 3% for a long time: close to the 3.5% bum...