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I will say, this past inflation spike has completely broken the assumptions I had from 1970s economics that employers would raise their 'cost of living' raises

I will say, this past inflation spike has completely broken the assumptions I had from 1970s economics that employers would raise their 'cost of living' raises to keep pace with inflation. My employer seems to think 2.5% is fine, as they've done it multiple years in recent past with only one extraordinary year netting 4%. I am now very skeptical of any so called 'wage price spiral'

ajmurmann 5mo ago
Nobody gives you cost of living increases. That's not how a market works. You get cost of LABOR increases. These are related but only indirectly.
triceratops 5mo ago
Employers pay you the least amount of money it takes to keep you from working somewhere else. It's always been true and it probably always will be.
alistairSH 5mo ago
Employers will increase your wages just enough to keep you from leaving. With structural disincentives to leaving (medical coverage in the US), that is almost always a less-than-inflation amount. Do employers even call it a COL increase any more? My employer "rebranded" the annual raises as "merit increases" many years ago.
- kccqzy 5mo ago
  All of my employers, current and past, have or had only merit increases. COL increases are unheard of.
  - wing-_-nuts 5mo ago
    How big are your merit raises, typically?
    - kccqzy 5mo ago
      Typically around 7%.
WarmWash 5mo ago
That's why macro economic data is based on nationally reported data from tens of thousands employers rather than just one company. We can look at the data and clearly see the inflection point where wages started rising faster once the pandemic began. https://fred.stlouisfed.org/series/ECIWAG https://fred.stlouisfed.org/series/ECIWAG And looking at real wages, we can see that wages have actually outpaced inflation since ~2015 https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
- b40d-48b2-979e 5mo ago
  wages have actually outpaced inflation since ~2015 Yeah.. just ignore the 30 years where it was basically stagnant.
  - WarmWash 5mo ago
    The driver of real wages is the economic level of the whole country, which moves at a pretty slow pace (if at all) for an advanced economy. Many jobs today pay around the same as they did 30 years ago, because dollars (currency) aren't a measure of true value, and lots if not most jobs produce the same relative value today as they did 30 years ago. To put that more plainly, lower class, middle class, and upper class defining jobs pretty much stay the same.
disgruntledphd2 5mo ago
> I am now very skeptical of any so called 'wage price spiral' The wage-price spiral now happens when people move. I've definitely noticed that average salaries for my role (data person) have increased singificantly since 2020 or so.

ajmurmann 5mo ago

Nobody gives you cost of living increases. That's not how a market works. You get cost of LABOR increases. These are related but only indirectly.

triceratops 5mo ago

Employers pay you the least amount of money it takes to keep you from working somewhere else. It's always been true and it probably always will be.

alistairSH 5mo ago

Employers will increase your wages just enough to keep you from leaving. With structural disincentives to leaving (medical coverage in the US), that is almost always a less-than-inflation amount. Do employers even call it a COL increase any more? My employer "rebranded" the annual raises as "merit increases" many years ago.

kccqzy 5mo ago
All of my employers, current and past, have or had only merit increases. COL increases are unheard of.
- wing-_-nuts 5mo ago
  How big are your merit raises, typically?
  - kccqzy 5mo ago
    Typically around 7%.

WarmWash 5mo ago

That's why macro economic data is based on nationally reported data from tens of thousands employers rather than just one company. We can look at the data and clearly see the inflection point where wages started rising faster once the pandemic began. https://fred.stlouisfed.org/series/ECIWAG https://fred.stlouisfed.org/series/ECIWAG And looking at real wages, we can see that wages have actually outpaced inflation since ~2015 https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q

b40d-48b2-979e 5mo ago
wages have actually outpaced inflation since ~2015 Yeah.. just ignore the 30 years where it was basically stagnant.
- WarmWash 5mo ago
  The driver of real wages is the economic level of the whole country, which moves at a pretty slow pace (if at all) for an advanced economy. Many jobs today pay around the same as they did 30 years ago, because dollars (currency) aren't a measure of true value, and lots if not most jobs produce the same relative value today as they did 30 years ago. To put that more plainly, lower class, middle class, and upper class defining jobs pretty much stay the same.

disgruntledphd2 5mo ago

> I am now very skeptical of any so called 'wage price spiral' The wage-price spiral now happens when people move. I've definitely noticed that average salaries for my role (data person) have increased singificantly since 2020 or so.