Recent wage claims reported in the news from some unions are for 15% or more.
With the current(2024) inflation rate at 3.53% (Statisca.com) people can be excused for thinking these claims are excessive but let’s do the numbers.
Firstly, it’s important to know that inflation does not go backward. So when the media says inflation has fallen to 3.5% they are wrong.
A more correct statement would be that inflation hasn’t risen as much as the previous period. In other words, inflation is compounding;
2020; $1.00 = $1.00
2021; inflation 2.82%. $1.00 = $1.03
2022; inflation 6.61%. $1.00 = $1.10
2023; inflation 5.6%. $1.00 = $1.16
2024; inflation 3.53%. $1.00 = $1.20
So if you haven’t had a pay rise since 2020, you need a 20% rise just to be even with the same buying power.
Assuming you have had a pay increase of 2.5% each year (and that’s a big if), you’d still be 9% behind.
3 responses to “Wage Claims”
Considering that the wage price index has been showing a massive increase post covid it seems workers asking for a more equitable wage and it’s working, through I mostly assume new hirings for those covid lay offs and staff jumping ship with current employers not getting with the program of pay your workers more. I do worry that the increase in imported workers could lead to a repeat of low growth in coming years.
And wage claims are often presented in media in isolation from other aspects of the economy. It would be interesting to have figures of CEO pay rises over the same period, or company profits.
While I understand this post is about wage claims it does also make me think of those in the community who are not wage earners – those on social security (ha ha) for example. The increasing wealth inequality is frightening.
You should create a blog 😆