I understand that there are shareholders and costs increase, but surely the cost increases should be at the rate of inflation?
I know a load of companies increase by like 3.9% + Inflation every year – so why is it that when employees get pay rises they’ll always be less than the rate of inflation?
Doesn’t that just mean employees get poorer every time? Where does the extra 3.9% money actually go? Where does the difference between employees payrises and rate of inflation go?
Are all companies just screwing their employees or is there some other reason I’m not realizing?
In: Economics
“Get away with”? Employees are mostly paid the rate established by the market for their services. That definitely can get out of whack for a period of time at a given company or a given market, however, so sometimes employees get larger raises and sometimes they get smaller raises (or no raise). If cybersecurity is a hot industry for five years, then cybersecurity employees might see 10-15% annual raises for a while, especially if they’re early in their career. Suddenly there’s a tech recession and cybersecurity tools start including AI features that reduce staffing needs, and cybersecurity employees might see layoffs and wage stagnation for a while.
Companies don’t set pay rates to either screw employees or to enrich them. They set pay rates to maintain the employees they think they need.
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