4 ms·

How are wages usually managed in the US on scenarios like these? From the outside, it looks like there are no unions to push for wage inflation raises, is that

How are wages usually managed in the US on scenarios like these? From the outside, it looks like there are no unions to push for wage inflation raises, is that correct? I wish we had only 7% inflation here... (Argentina)

kamarg 5y ago
I wasn't old enough to be employed the last time the US had inflation this high but I can tell you that my current employer has stated that we aren't getting cost of living adjustments despite the high inflation. Instead they're claiming that raises will be based on each employees contribution to the company. Which would be great if they actually meant it since all of us engineers would be getting very significant raises. What will actually happen is that all of us will get about 2% raises, a bunch of people will quit because the job market for developers is great right now, and then the company will hire in a bunch of junior devs for higher wages than the current junior devs are getting.
- nradov 5y ago
  So then the labor market is functioning as expected.
micromacrofoot 5y ago
If you have a good job they recognize inflation and compensate accordingly, if you're 99% of the population you get screwed or find another job.
- Ericson2314 5y ago
  https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q wage earners are up, even adjusted for this inflation. Labor shortage -> real worker power -> solidify gains with unions Trying to boost unions when labor is on the ropes is foolish preaching from vicarious onlookers.
aparks517 5y ago
The companies I've worked for have had periodic (every 6 or 12 months) performance evaluations with associated pay adjustments. The pay adjustment would be broken out into a cost-of-living increase (notionally tracking inflation) and a performance increase (or decrease I guess) based on the employee's performance evaluation. I'm sure it varies by employer, but this seems to be common in my area and industry at least. We do have unions in the US, though I've not worked in a union shop before. Union contracts vary, but I get the idea it's not uncommon for them to include pay adjustments based on inflation.
nostrademons 5y ago
It's really variable across industries. In competitive industries like software engineering, you quit and get a new job and then they pay you 10-20% more. In monopsony industries like government, you suck it up and get a 3% cost-of-living increase while gradually falling behind on inflation. In unionized businesses (there aren't many left), your union fights for a 7% pay increase and you basically stay awash with inflation. In competitive small businesses, you try to quit to get that big raise but then find that no other small business has the money to pay you, so you spend your nights, weekends, and downtime on the job doing a data science bootcamp and then quit for a 10x salary boost. It was the same in the 1970s. My mom (teacher) said that when she entered the workforce in the late 60s, teachers were paid about 20-30% less than professional occupations like doctors, lawyers, and engineers. By the early 1980s, the latter were making 2-3x more but teacher salaries had barely budged. By the time I entered the workforce in the mid-00s, software engineer starting salaries were about the same as teacher pre-retirement salaries, mid-career was 2-3x more, and the top end was 10x+ more.

kamarg 5y ago

I wasn't old enough to be employed the last time the US had inflation this high but I can tell you that my current employer has stated that we aren't getting cost of living adjustments despite the high inflation. Instead they're claiming that raises will be based on each employees contribution to the company. Which would be great if they actually meant it since all of us engineers would be getting very significant raises. What will actually happen is that all of us will get about 2% raises, a bunch of people will quit because the job market for developers is great right now, and then the company will hire in a bunch of junior devs for higher wages than the current junior devs are getting.

nradov 5y ago
So then the labor market is functioning as expected.

micromacrofoot 5y ago

If you have a good job they recognize inflation and compensate accordingly, if you're 99% of the population you get screwed or find another job.

Ericson2314 5y ago
https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q wage earners are up, even adjusted for this inflation. Labor shortage -> real worker power -> solidify gains with unions Trying to boost unions when labor is on the ropes is foolish preaching from vicarious onlookers.

aparks517 5y ago

The companies I've worked for have had periodic (every 6 or 12 months) performance evaluations with associated pay adjustments. The pay adjustment would be broken out into a cost-of-living increase (notionally tracking inflation) and a performance increase (or decrease I guess) based on the employee's performance evaluation. I'm sure it varies by employer, but this seems to be common in my area and industry at least. We do have unions in the US, though I've not worked in a union shop before. Union contracts vary, but I get the idea it's not uncommon for them to include pay adjustments based on inflation.

nostrademons 5y ago

It's really variable across industries. In competitive industries like software engineering, you quit and get a new job and then they pay you 10-20% more. In monopsony industries like government, you suck it up and get a 3% cost-of-living increase while gradually falling behind on inflation. In unionized businesses (there aren't many left), your union fights for a 7% pay increase and you basically stay awash with inflation. In competitive small businesses, you try to quit to get that big raise but then find that no other small business has the money to pay you, so you spend your nights, weekends, and downtime on the job doing a data science bootcamp and then quit for a 10x salary boost. It was the same in the 1970s. My mom (teacher) said that when she entered the workforce in the late 60s, teachers were paid about 20-30% less than professional occupations like doctors, lawyers, and engineers. By the early 1980s, the latter were making 2-3x more but teacher salaries had barely budged. By the time I entered the workforce in the mid-00s, software engineer starting salaries were about the same as teacher pre-retirement salaries, mid-career was 2-3x more, and the top end was 10x+ more.