Why shouldn't we expect pay raises take a hit at a time like this? The US economy is not growing much, if at all, and in fact is most likely in a recession. There's a strong possibility that inflation in the next 12 months will be well under 2%, and that we may even slip into deflationary environment overall. In a -1 to 1% inflationary environment, we should be happier with a 2.5% increase than with a 5% increase in an 8-10% inflationary environment. If you ask most people, they'd be happier with the second case however.

(I'm hoping my own salary review is completed prior to my boss reading this HN comment, but honestly, if I don't get a merit increase, I'm not going anywhere, so there's relatively little tension to compel them to grant me one.)