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Does deflation occur? If yes, I am not too old to see it I guess. And one can argue that the company should be the one asking for pay reduction in that case. A

• ericmay 4y ago
  > Are these people really dumb I'd say it's less "dumb" and more that the incentives are aligned in such a way that they just won't do it. But we know that it works well. Netflix I think is/was known for finding out new market rates and just giving everyone a raise to reflect that rate so they don't leave. Also I think people in positions where they're making the call on rates don't have data or other information to really assess what we see as so obvious, which is that losing an engineer over a 5% pay increase during a period of inflation is far more costly than just giving them the pay increase. But I see this kind of thing all the time. There are a lot of what I call "boomerang companies" especially Fortune 500 where if you want a meaningful raise at the company you have to leave and then get hired back. Problem is many leave and don't come back, so the company churns talented people and keeps all the people who can't get higher rates on the market. It's really silly.