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.”
