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Worker pay isn’t keeping up with inflation

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Re: Worker pay isn’t keeping up with inflation

#101

Post by thatjoeoverthr »

wing-_-nuts wrote: post #20

We had an all-hands meeting recently where we got to submit anonymous questions. One of the questions was 'with inflation rising at 6%, will the company reconsider their 'standard' 2% raise?' The lady answering looks dead in the camera and goes 'Honestly? No' and goes on to talk about how we're reasonably competitive with the local market. Hey, credit where credit is due, at least she was a refreshingly straight shoo…

I just went through this. They gave a one percent raise, last year, because COVID. (The company was fine.) Inflation around five. I talked to recruiters and got a new job, with nearly forty percent increase. Prior employer offered me a large increase to stay. I did not. A raise below inflation is a pay cut. That’s enough.

Re: Worker pay isn’t keeping up with inflation

#102

Post by landemva »

lottin wrote: post #50
paxys wrote: post #19

Looking at the chart it's pretty obvious that wages aren't pegged to inflation in any way. You will always be paid based on the conditions of the labor market, not the price of an arbitrary basket of goods. Heck you can see that wage growth outpaced inflation in ~10 of the last 12 years. Isn't that a good thing?

In general, prices are not pegged to inflation. Inflation is a change in the price level, but prices also change for reasons that have nothing to do with changes in the price level, e.g. in the case of wages, the supply and demand for labour.

Prices also change due to manipulation.

In 1998 Alan Greenspan testified to Congress that central banks lease paper gold to suppress the gold price. '... central banks stand ready to lease gold in increasing quantities ...' https://www.federalreserve.gov/boarddocs/testimony/1998/1998...

It is law that Treasury is allowed to secretly manipulate prices of cuurencies, stocks, bonds, and commodities. https://home.treasury.gov/policy-issues/international/exchan...

It's rigged and the chance of the insiders not trading for their own personal accounts is approximately zero.

Occasionally the commoners get a few scraps like WSB on gamestonk in early 2021.

Re: Worker pay isn’t keeping up with inflation

#103

Post by simonh »

onion2k wrote: post #67
AnthonyMouse wrote: post #54

Earlier quoted context omitted.

> If you want a raise the best thing you can do is find a new job. Note that this doesn't always even involve taking it. Go get a job offer that pays better and bring it to your boss. If they want to match it, great. If they don't, bye.

From the other side, whenever a member of my team has come to me asking to match an offer I've always refused and wished them well in their new role. If someone is unhappy enough to start job hunting rather than talking to me then it's a clear sign that they'll leave soon regardless of any pay rise. Psychologically, every pay increase makes someone happy for a short time, and then they get used to it and they start t…

You’re taking a lot of flak for this so I’ll try and back you up a bit.

Not all workers are equivalent, and not all roles that seem the same even in the same team, actually are. Let’s say we have a team of 10 people, each with slightly different experience and skills. One of them finds another job with higher pay and asks for it to be matched. What do you do?

It’s quite possible this other role actually matches their skills better than the one with you does. Maybe they are actually worth more to this other company than they are to you. Maybe they had other reasons for looking for a job aside from pay, maybe they’re tired of the job or want a fresh challenge. Maybe it’s a combination of all sorts of factors. Pay is only one.

If you do increase their salary, what about the rest of the team, do you pay them more too? Do they all have the attributes this other company valued in the person they made the offer to? Would they have all got the same offer? Probably not, but now you’ve upped the going rate for a member of your team. They will want the same.

It’s just a really messy situation to get into. If staff retention and recruitment is a problem or you don’t want it to become a problem then sure, of course you should make sure your compensation rates are fair. Of course under paying your team will cause problems. But one person getting one job offer doesn’t necessarily mean anything, except for them.

Re: Worker pay isn’t keeping up with inflation

#104

Post by aeternum »

nicoco wrote: post #56
aeternum wrote: post #37

Earlier quoted context omitted.

It's foolish to raise by 6% across the whole company when most employees are too lazy to interview elsewhere. Whether or not employees are actually worth 6% more they should not have a problem finding a new job in this market (that will pay 6% more).

I think you're missing the point. With a 6% inflation, a 6% raise means the employees are worth the same as before , not more.

Depends on whether we're talking about real or nominal wages. Regardless, my main point is that most people must switch jobs to see the increase. Wages grew 6.6% for job switchers so it is keeping up with inflation.

IT and professional services was 10.5%+ but again only for job switchers.

https://www.valuepenguin.com/news/ADP-wage-growth-report

Re: Worker pay isn’t keeping up with inflation

#105

Post by landemva »

neilwilson wrote: post #45
ars wrote: post #17

Is this inflation due to expansion of the money base? Or inflation due to rising costs? If the second one, there where is all that money going? Who is that "cost" that is benefiting?

The current price changes are due to a lack of supply, which the market is rationing. Remember firms will always try to charge a fortune for their stuff. It's only competition that stops that happening. Competition is excess supply, or at least excess supply capacity. When competition stops being effective, prices go up.

At least in USA, there is not really a shortage of natural gas or gasoline. Yet the prices have ramped up.

Re: Worker pay isn’t keeping up with inflation

#106

Post by hellotomyrars »

missedthecue wrote: post #12
gnu8 wrote: post #7

It is largely because of the power imbalance between capital and labor. Capital sets the prices of goods and also sets the price it pays for labor. The solution is strong and broad based labor unions, but capital has labor convinced that it is against their interest to organize. I hope this boils over and we start hanging capital from the street lights.

Why does the US, a society with low union membership rates have much higher median salaries both before and after taxes and government benefits than in Europe where there are lots of powerful unions? https://data.oecd.org/hha/household-disposable-income.htm

Anecdotally I will say that my union has doubled the wages of its members in the last 10 years. There are also twice yearly cost of living raises.

As another commenter has pointed out, median doesn’t tell the story accurately when it’s being pushed largely by incredibly disproportionate growth in top 10% of earners.

I love my Union, and I’ll grant you that Unions aren’t universally good due to people being shitty but I wholly believe in Unions and hope more people organize. It is the only meaningful way for labor to get what they deserve.

Re: Worker pay isn’t keeping up with inflation

#107

Post by moooo99 »

JumpCrisscross wrote: post #25
missedthecue wrote: post #12

Earlier quoted context omitted.

Why does the US, a society with low union membership rates have much higher median salaries both before and after taxes and government benefits than in Europe where there are lots of powerful unions? https://data.oecd.org/hha/household-disposable-income.htm

We’re better at preserving the threat of new entrants. Truckers routinely start their own businesses here. That’s tougher in most of Europe, where labor laws making hiring and firing strikingly expensive.

> That’s tougher in most of Europe, where labor laws making hiring and firing strikingly expensive.

That is true. Personally and anecdotally I find that to be a good thing. I feel much more comfortable with 35h work week, 35 days of paid vacation making €60k without living in the fear of getting fired the next day.

Even if I could get more money in the US, I highly doubt that my standard of living would increase enough to justify the uncertainty that would come with this move. And I think that difference is even more extreme with jobs that don’t require years of education beforehand.

Re: Worker pay isn’t keeping up with inflation

#109

Post by decebalus1 »

missedthecue wrote: post #12
gnu8 wrote: post #7

It is largely because of the power imbalance between capital and labor. Capital sets the prices of goods and also sets the price it pays for labor. The solution is strong and broad based labor unions, but capital has labor convinced that it is against their interest to organize. I hope this boils over and we start hanging capital from the street lights.

Why does the US, a society with low union membership rates have much higher median salaries both before and after taxes and government benefits than in Europe where there are lots of powerful unions? https://data.oecd.org/hha/household-disposable-income.htm

Bull.. ahem.. shit. If you want a fair comparison, compare the incomes of union workers vs non-union workers within the same country or COL area doing similar jobs. If unions would bring wages down, corporations would be all over that and will sign you up on the first day. Use your head, damn it.

Re: Worker pay isn’t keeping up with inflation

#110

Post by landemva »

missedthecue wrote: post #16
MattGaiser wrote: post #10

There is this 40% or so of the population that will not switch jobs. I don't know why you would ever give them a raise because as their reaction to it is just going be to complain and go back to work.

It's worth noting that switching jobs for pay raises is mainly a white collar thing. If you work in trucking for instance, where productivity is capped, worker differentiation is minimal (meaning two different truckers perform essentially identical work unlike engineers or salespeople), and where industry margins are thin, you'll top out relatively quickly. After that, switching companies isn't going to do all that m…

Bad example, as trucker turnover historically is over 100% each year. https://www.fleetowner.com/operations/drivers/article/211453...
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