ExxonMobil is going to be giving out its largest raises in more than 15 years due to increased profits and decades-high inflation.
- The last year has seen some of the highest inflation rates since the 1970s, with a peak of 9.1% in June and 7.8% in November.
- It has also been an expensive year for gas prices due to the ongoing war in Ukraine causing supply shortages, with a peak of $5.02 per gallon national average on June 14. The current national average is $3.33 per gallon.
- The fossil fuel-industry has benefited from the past year though, posting record profits during its quarterly announcement last month and marking some of its highest profits in the company’s 152-year history.
- ExxonMobil is paying forward some of this extra profit to its employees, offering a 9% average raise to most employees and an additional 5% raise to recently promoted employees, Bloomberg reports.
Why it’s News
The bump is a welcome addition for employees who are dealing with inflation issues. Exxon’s raises exceed the current rate of inflation and will help its employees adjust to higher costs of living in the next year.
“The hikes come after the oil giant saw above-average attrition among employees during leaner years, and as high-paying tech and finance companies are cutting jobs and bonuses,” says LinkedIn News.
Exxon previously laid off employees and froze pay raises and benefits for the previous three years. This year’s raises and benefits come as a needed corrective for oil and gas workers taking a hit from inflation.
As we previously reported, many companies are facing the coming financial stresses expected in the next year with mass layoffs. Exxon’s actions speak to the confidence of the company and its expectations for continued growth and profit going into 2023.
Backing up a Bit
Fossil fuel companies have received much criticism in the past year for high gas prices. Politicians like President Joe Biden, Senator Bernie Sanders (D-VT), and Senator Elizabeth Warren (D-MA) have accused the entire industry of “war profiteering” and have threatened punitive legislation against the industry.
Warren proposed a Windfall tax in March to suppress “war-fueled profits.” President Biden made corporate profiteering a talking point in the 2022 midterms, threatening higher tax rates if oil companies do not lower gas prices, increase drilling, and reduce their profits.
Oil and gas companies have little incentive to cooperate and open additional drilling sites at the moment though, as world governments are actively disincentivizing fossil fuels and plan to radically reduce the industry through net zero-emissions goals by 2050 or sooner.