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
Why do you think companies can “afford” to increase wages equal to inflation without losing profit?
Looking at a specific example: aluminium forgery that’s very, very dependent on energy price. Cost for energy went up a factor of 4 at a certain point. Sales price could not be increased. How would that company not increasing wage by inflation screw over their employees?
Or governments, their income is tax. Should they increase tax (in absolute numbers) with the inflation in order to be able to pay increased wages?
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