So, looks like I’ve been offered a below inflation pay rise…

Inflation ~4%

Pay rise 2.2%

…and given the amount I spend on alcohol, my “personal” inflation rate is probably much higher.

Although I don’t really agree with the idea of personal inflation rates. First of all, “personal” inflation rates ignore substitution effects. If one good I’m accustomed to buying becomes significantly more expensive, I can switch to one which has not. That is the sort of thing which is ignored in “personal” inflation rates.

Secondly, far too many people confuse relative price changes, which have nothing to do with inflation, with general price changes, which is inflation. For example when oil shoots up in price people start talking nonsense about how hyperinflation is on the way. But if oil gets mroe expensive relative to other things, then it just gets more expensive. That’s not really inflation.

Anyway, I’m doing my best to keep my wages as sticky as possible, so I’ll keep you all updated.


8 thoughts on “So, looks like I’ve been offered a below inflation pay rise…

  1. A payrise! You lucky, lucky B*%£$% – keep it quiet or everyone will want one. Pay rises are a distant memory (I work in IT), andI are supposed to be greatfull if I get to keep my job this quarter as it has not yet been cheapshored.

  2. It isn’t a pay rise, its a small pay cut. Don’t confuse nominal and real ammounts.

    But yes, I’m grateful I work in the sort of service sector job where it is almost impossible to outsource my job. Although the pay isn’t exactly princely.

    Hmm… WordPress has a new commenting system. Not bad.

    1. It’s less of a pay cut than a 0.00% “rise” would have been, which is what many of us in the IT industry have had to put up with for the last few years. Mind you, we were generally not exactly badly paid to start with, all things considered…

      Still, the fact that even below-inflation pay rises are now considered a luxury is not exactly heartening. Except for the shareholders, of course…

      1. Yeah, well paid IT people do complain a bit more than I’m entirely happy with, considering Indians are as well qualified as they are, and willing to work for less.

        I’m just a victim of poor aggregate demand. If the BoE were doing their job correctly, we’d have a little more business, and I’d probably have had an inflation matched, rather than inflation missing pay rise.

        Not sure sympathy is what either me or IT professionals, or any other group seeing their incomes shrink needs.

        1. “Indians are as well qualified as they are”

          Some of them may well be, but having done technical assessments on the results of a number of off-shoring and out-sourcing deals, I’d have to say that most of them seem operate on the principle that if you just have enough people bashing at enough keyboards, you’ll probably get something right eventually. Except they obviously never have enough people or keep bashing long enough… Nor do they do a very good job of filtering the results.

          There’s a big difference between being qualified and being capable, especially when you can simply buy the real questions and answers for any certification exam you like.

  3. So it’s not a pay rise, it’s a small positive offset – enjoy.

    Don’t get bogged down in theoretical comparisons. The amount of money you get will be higher then you where getting. That’s the only comparison that counts.

    You are not dead, and still employed – rejoice! It won’t last forever.

    1. True,

      Don’t worry, I am more than aware how lucky I am in general. I’m having quite a good time at the moment.

      But I disagree that “The amount of money you get will be higher then you where getting [and that is] the only comparison that counts. ”

      What that money buys is important too, arguable more so. The phrase is The Money Illusion.

      And it looks like I will be able to buy less next year doing the same work than I could last year. That what matters to me.

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