Can you believe that inflation is at 8.5% right now? 8.5%
Keep in mind, this is the core percentage rate. Meaning this is how much the price of goods and services has increased. This does not include food and energy price increases which are at 8.8% and 32% respectively. Here is an article explaining how inflation is measured, for those who are curious.
To feel a little better about all of this, know that the rate of inflation changes month to month. It will go down. It must go down.
Let’s take a moment to work through the causes of inflation. Bear with me, I promise it relates to you as a job seeker.
This factor of inflation happens when the demand for goods and services is more than what’s available.
For example, think about what happened to the PS5. Sony strategically released a limited amount around the holidays for two years in a row. Some people were able to buy a lot of consoles at once, further reducing the stock. The demand for what was readily available was significantly more than what was on the shelves, driving prices sky high for those who sold on third party sites.
Cost-push is the increase in prices of goods and services when the cost of wages and materials increase.
A great example here is lumber. When lumber prices went up 400% in early 2021, it impacted the increase in housing prices. It cost more to make a house, so house prices went up.
Increased money supply
The total amount of money in circulation went up. When this happens faster than the rate of production, we get demand-pull inflation.
The purchasing power of 1 U.S. dollar is now 1.02. 20 years ago, it was at 1.86.
The dollar just isn’t worth what it was. This makes our exports less expensive. Encouraging foreign nations to buy more exports because they’re cheaper. Decreasing our supply.
On the other hand, it makes foreign exports more expensive for us. Which encourages us to buy more domestic products. Also decreasing our supply. Causing inflation.
YES! We are getting paid more!
But employers aren’t too thrilled to be doing this. They are put in a position of either passing the cost onto their customers by raising the prices of their goods OR they have to live with lower margins.
We can all guess which one they’ll likely go with. This leads to cost-push inflation.
“I continue to believe that the American people have a love-hate relationship with inflation. They hate inflation, but love everything that causes it.” ~William E. Simon
What does all of this mean for you?
It means a few things. It means you have more leverage than ever in negotiating a raise. It means you have the possibility to change careers since the job market is booming. It also means there are a lot of scams, false advertising, and tighter competition.
Last year, employers were planning for pay increases. They saved, on average, 3.9% of total payroll for wage increases in 2022.
They have the money. It’s time to ask for your cut.
Now you have the chance to provide concrete raises for giving a wage, instead of just hoping.
Inflation is only one reason to provide.
Before you have your meeting to discuss your wage increase, do your homework. Colorado and New York City have new laws that require pay to be disclosed on job listings. Compare the cost of living to the wage offered to a similar position in Colorado as your own area, adjust accordingly, and leverage that information to your benefit.
Make sure to practice your pitch before you get in front of your bosses.
Use questions to help negotiate. If your boss says you are going to get a 2% raise, ask them how they arrived at that figure. If their answer is along the lines of it being “the standard” or “that’s just how it is”, do not accept that. Counter with your desired amount (aimed a little higher, of course) and solid reasoning. Their “because I said so” attitude won’t work. Times have changed, so your employer has to change.
A career change right now doesn’t have to mean jumping to a whole new field.
It could mean finding a better paying position in the same field.
The only way to find out is by getting your resume out there and taking the interview.
You likely do not want your current employer to know you’re shopping around, so read here to find ways to go undercover job hunting.
Scams, False Advertising, & Tighter Competition
Have you been on some of the popular job boards lately? Phew. It is getting tougher to distinguish which is an actual, legitimate position versus a bogus post.
An easy way to combat this is to start with job listings local to you. There are plenty of local, remote positions and a lot of employers are looking for people close by in hopes of getting people back into the office.
False advertising is becoming rampant too. That might be a stretch. It’s more like sneaky advertising.
A local gas station posted a NOW HIRING sign with starting wages of $14 an hour! That’s really exciting in states that have a $7.25 minimum wage.
Getting closer, though, you’ll notice it says UP TO $14 an hour. That means if you were hoping to run the cash register at $14, you’d be sorely disappointed. You’ll likely still be getting the $7.25.
This is not a phenomenon unique to the service industry. The moral of the story: read the fine print.
Lastly, if you are targeting remote only positions, you are now competing with the world. Now would be a great time to increase your skills with continuing education. Also, look to your current employer for their policies on tuition reimbursement.
Connect on LinkedIn: www.linkedin.com/in/mary-southern