55% of workers say their pay isn't keeping up with inflation

And headline inflation is just one part of the story. Broad money growth has averaged around 7% for decades for USD, similar for other ‘stable’ currencies, and much worse for the ‘not so stable’ currencies.<p>If you’re rich enough, you won’t keep your value in cash, but rather will buy some assets using it (equity, property, whatever). If you’re rich enough and smart enough you’ll have realized that you can take loans to finance asset purchases in effect shorting the currency.<p>However, if you’re not rich enough, depend on your wage, and can’t short the currency by buying up assets, you get the short end of the stick. Some say this is by design.<p>I recently read an article in the Economist arguing how income inequality has actually gotten better in the rich world. They argued that the wage gap between blue collar and white collar workers has been shrinking. I expect that to accelerate with the advent of AI.<p>But the wage gap says less and less about income inequality when the society gets divided into owner and wage bound classes.

You got still robbed, even if you did get a pay increase at the end of the year. They measure the increase in prices over a year and sometimes increase pay to match it But you have already worked a year for the lower salary. It would be fair if the pay increase is slightly higher than the inflation.

In the UK I haven&#x27;t had a pay increase anywhere near inflation since 2019. I&#x27;ve had to move company twice since then in order to maintain or increase my standard of living. I&#x27;m now making 65% above what I was making in 2019, whereas if I&#x27;d taken the pay increases offered I&#x27;d be making 13% more right now than in 2019.<p>Considering prices in the UK are 22% higher than they were in 2019 that&#x27;s pretty bad, and IT is a well-paid industry, so you can imagine what it&#x27;s like for people on lower wages.

Inflation is a government policy. It is a method to deflate the real value of government debt.<p>Like many government policies, unintended consequences generate headlines about how one policy negatively affects part of a society that another policy is working to protect.<p>At a macro level, government debt can only be resolved two ways: increase taxes to meet maturing obligations; reduce the real value of the obligations via inflation (and&#x2F;or a combination of the two).<p>Future economist will have two national debt policies to analyze: Germany (with its constitutional low-debt mandate) and US which discovered over time that it could issue debt at far greater amounts than previous economist ever thought possible.

The main reason for wage suppression is more tied to the country wanting to intentionally devalue its own currency through inflation because of recessions (or fear of recession).<p>Devaluing the currency and wage suppression are done in order to make exports more profitable for companies so they can start growing again (or prevent them from going bankrupt during a recession) and to later reinvest to trigger economic growth again. At the same time also to reduce the number of imports due to them being more expensive due to inflation. It is all about rebalancing the trade deficit.<p>Wage suppression is a well known way to get economies out of a recession, it is not necessarily a way to fight inflation (the inflation, to some extent, is desired in order to devalue your own currency). After the recession is over there is usually a period of market imbalance where new hires get inflation-adjusted salaries and tenured employees either eat the loss or are forced to move jobs to get competitive salaries again.<p>But yeah, it is the peons (wage-earners) who get screwed at the end, asset-owners (people who own stocks, property or companies) mostly get to ride it out unscathed.

The argument often used by governments is that pay rises drive inflation, so must be supressed in order to pull inflation back down.<p>Problem is, that&#x27;s not entirely true. The OECD[1] looked at whether workers, business or governments had contributed most to inflation, and the data revealed that in the UK at least, business profits were most to blame.<p>If wages don&#x27;t drive inflation, and profits do, you can lower inflation, increase quality of life and create a more equitable society by putting pressure on business to pay their staff more, and have smaller profits.<p>Of course that won&#x27;t happen, because we&#x27;re now living in a dystopian Ayn Rand&#x2F;Margaret Thatcher-inspired wet dream, so y&#x27;know, be safe out there and godspeed.<p>[1] <a href="https:&#x2F;&#x2F;www.oecd-ilibrary.org&#x2F;sites&#x2F;ce188438-en&#x2F;1&#x2F;3&#x2F;1&#x2F;index.html?itemId=&#x2F;content&#x2F;publication&#x2F;ce188438-en&amp;_csp_=f8e326092da6dbbbef8fbfa1b8ad3d52&amp;itemIGO=oecd&amp;itemContentType=book#figure-d1e804-6539cc9538" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.oecd-ilibrary.org&#x2F;sites&#x2F;ce188438-en&#x2F;1&#x2F;3&#x2F;1&#x2F;index....</a>

In Australia the ACS (Australian Computer Society), &quot;the professional association and largest community for Australia&#x27;s technology professionals&quot; is telling the world that the median hourly rate of $57.08 is too high and that professionals should expect &quot;rebalancing&quot; after the pandemic.<p>For context, inflation adjusted, in 1998 (25 years ago!) when I was a generic IT help-desk operator at a local University I was earning that rate. So, apparently in ICT we&#x27;re earning too much and we should be happy about it.<p>Source: <a href="https:&#x2F;&#x2F;ia.acs.org.au&#x2F;article&#x2F;2023&#x2F;it-teams--salaries--rebalancing--after-pandemic.html" rel="nofollow noreferrer">https:&#x2F;&#x2F;ia.acs.org.au&#x2F;article&#x2F;2023&#x2F;it-teams--salaries--rebal...</a>

Why is the story talking about feelings alone and not what we can actually measure: raises in salary vs COLA?<p>Spoiler: because it&#x27;s a puff piece.

In Italy, salaries decreased from 1990. In all other countries they increased.<p><a href="https:&#x2F;&#x2F;www.reuters.com&#x2F;markets&#x2F;europe&#x2F;why-us-italy-seeks-way-out-low-wage-economy-trap-2022-06-16&#x2F;" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.reuters.com&#x2F;markets&#x2F;europe&#x2F;why-us-italy-seeks-wa...</a>

If pay kept up with inflation, then inflation would never subside.<p>Sometimes real wages are grow, and sometimes they shrink.

&gt; 55% of workers say their pay isn&#x27;t keeping up with inflation<p>If you apply strict mathematical interpretation to that sentence I guess that means that salaries are pretty spot on with keeping up with inflation.<p>I.e the rest 45% implicitly says it keeps up with inflation.

Anectdotal: I got a raise after two years working for my current company. It&#x27;s nice, to be sure, but it doesn&#x27;t cover inflation according to the BLS inflation calculator.

Haven’t gotten a raise in three years (so probably 25% down in purchasing power). If I made less and had more expenses, I would be pissed. Can’t blame others that are.

Mr Burns: Excellent... that&#x27;s how it was meant to be

Only 55%? The other 45% (minus those CEO’s getting 16% pay rises) are either ignorant or extremely lucky.

Only 55%?<p>I guess this is US only (but doesn&#x27;t say so...)

Over the last 10(?) years pay increase was ahead of inflation. Mind you, that&#x27;s just an observation – but I don&#x27;t understand why pay keeping up with current inflation would even be the expectation? These things are not synchronised, in either direction.

It&#x27;s good, it means we are not going in an wage-price spiral <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Wage-price_spiral" rel="nofollow noreferrer">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Wage-price_spiral</a>