INFLATION!
How does an employee gauge their worth? how does an individual negotiate a salary? The federal reserve has calculated that this year’s inflation is 7.5% 8.5%, does this mean that an 8.5% raise is a 0% raise? Should wages be compared with Gold? cryptocurrency? or my personal unit of measurement, Milk. two years ago, I could purchase a gallon of whole milk for 3.90$, today it’s around 4.90$ but my lazy tendencies have leaned on food delivery services like Instacart and I end up paying 5.70$. In my small world, the price of food items has increased to 20%, the price of vehicles is in orbit, and the price of luxury items is stuck behind the psychological barrier of the looming 2023 recession.
In this chaos, companies are facing a shortage of labor. It seems like companies are having a tough time retaining or hiring new employees. With heavy inflation, new contracts have increased according to the market, thus raising the demand for fulfilling contracts by hiring new employees. The demand for new employees increases the market rate for targeted positions. This increase in market-rate blows the whistle for current employees to look around for new opportunities. Meanwhile, management will struggle to raise the salaries of entire departments to match the current market rate. it’s a highly unusual situation when employees start making more than their direct reports!
My advice, keep growing your skillset, with inflation the future is unclear. Any action that allows a candidate to remain competitive in the job market is a must. I know former colleagues that have had a 0% raise in the past 2 years and shudder to think how inflation is ravaging their quality of life. My greatest fear is that in the age of the internet the balance between labor demand and wage will reach equilibrium faster, thus further increasing the price of services and goods. Hopefully this doesn’t “spiral out of amok”