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.
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