Reply #17: Inflation

[unlawflcombatnt]

Some places have an annual salary review, where they have a range of possible salary changes. The last HMO I worked for said you could get anywhere from a 5% raise to a 2% cut.

I suspect a lot of other places negotiate annual salary increases that are not keeping pace with inflation. A lot of employees simply aren't aware of what the annual inflation rate is for any particular year. So they're happy with a 2% pay increase, despite a 4% increase in the consumer price index.

And all of the firing and rehiring allows employers to replace old employees with newer, lower paid employees. This is one of the reasons the economic concept of "sticky wages" has less application today. There's so much job turnover that it's easy to replace a recently laid off or terminated employees with one who'll accept less.

unlawflcombatnt

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