09 Mar Inflation & Pay
Photo by olieman.eth on Unsplash
Yesterday, LinkedIn published an article titled, “Workers fear inflation outrunning pay,” which you can find here: https://www.linkedin.com/news/story/workers-fear-inflation-outrunning-pay-4702625/
The blurb, written by editor Taylor Borden, states, “Wages are up, but inflation is going up faster — and workers are worried. About 62% of American workers are ‘concerned about their salary keeping up with the rising cost of living,’ according to a recent survey from The Conference Board. Makes sense: Inflation is surging at its fastest rate in 40 years. The price of everything from a vodka soda at a bar to a home is way up. Nearly three-quarters of millennials reported fearing their paychecks won’t keep pace with those hikes, compared to 60% of Gen Xers and 59% of baby boomers. A separate report found that 64% of Americans are already feeling the squeeze and living paycheck to paycheck.”
This should yet again fly in the face of any hiring manager who haughtily says, “Well. Money shouldn’t be everything. People should come here and buy in to the mission with us!” Kinda hard to do that when you are worried about eviction, not eating, getting the car repo’ed, etc.
One of the people who responded to the post wrote:
A couple of things:
This is why I talk about doing what the crisis demands. Sometimes we may have to take on a job or a project we don’t enjoy or engage with a client we don’t like in order to generate cash. Again, this doesn’t mean that you don’t put effort in or that you intend to perform poorly. It simply means you keep the job or the project in perspective: I am doing this for the money.
As Mark observes: if workers are finding they have more month than money, they will look for a higher wage. And who can blame them? A lot of studies over the past few years – including those before the pandemic – show that job hopping leads to faster increases in pay than job staying.
There is also a link to this article on CNBC about inflation (https://www.cnbc.com/2022/03/08/as-prices-rise-64-percent-of-americans-live-paycheck-to-paycheck.html), which states that 64% of Americans are now living paycheck to paycheck. Lest you think this doesn’t apply to people making over $100K, it does:
“Even among those earning six figures, 48% said they are now living paycheck to paycheck, up from 42% in December, the survey of more than 2,600 adults found.” -Jessica Dickler, CNBC
The old yarn that $75K is the magical happiness number for salary is outdated. Adjusted for inflation, that number is closer to $100K. And in this current environment of hyper-inflation, it may soon go up to $150K or more. But that’s speaking in terms of lower cost of living parts of the country. In higher cost of living areas, it’s pretty brutal:
“In San Francisco, for example, a family of four with a household of under $120,000 is considered low income… Americans now say they need to be making roughly $122,000 a year, more than double the current national average salary, to feel financially secure, according to a separate report from financial services website Personal Capital.” – Jessica Dickler, CNBC
Another respondent to the article wrote:
Quelle surprise! (Not.) I feel like in some respects, this chart is Corporate America in a nutshell.
In the Bloomberg article that Caleb links to (which you can find here, but I believe requires a subscription to read: https://www.bloomberg.com/news/articles/2022-03-02/you-can-probably-forget-about-that-pay-hike-matching-inflation), the argument is made that at some point, the inflation will cool off and companies don’t want to be on the hook for high wages.
Because wouldn’t that be just terrible? 😣