Inflation is a term you hear politicians and economists throw around. You hear teams like ‘the cost of a bundle of goods’ and other hyperbole, but what does it really mean? More importantly, how can you use inflation number to make sure that you’re getting a decent salary increase?
In economics, inflation is defined as a rise in the general level of prices of goods and services over a set period of time. If the general price of those goods and services rises, than each unit of currency cannot buy as many. If a loaf of bread costs $1.00 last year but costs you $1.20 this year, but you still only have $1.00, than the price change is inflation.
Inflation has been relatively stagnant in the US in the past couple of years, however between 1 and 2% annually. However, many bosses across the country are using low inflation numbers as a reason that salary increases don’t need to happen. “We don’t need to keep pace with inflation,” they say, “prices aren’t changing.”
First, try and make the conversation about your efforts, and the results you’ve produced, rather than changes in the marketplace. Unless your company is having a banner year, with high sales growth and increasing profits, than your boss will try and use market conditions as a negative in your salary review. A well performing employee deserves a raise that not only keeps pace with but surpasses inflation, otherwise you aren’t really getting a raise at all. Remember that.
Second, get your data. There’s lots of inflation data on the web, and it is relatively easy to find. Make sure that you get good, accurate data that comes from the Consumer Price Index. The Bureau of Labor Statistics puts out that information monthly, so it’s easy to get up to date data. If your boss says inflation has held steady, you’ll now how the facts from the CPI to show that, in fact, it hasn’t. Prices are almost always going up, so use that to your advantage.
Finally, use stories. Everyone knows stories are an effective way to get a message across. Talk about specific parts of your life where the prices have increased, and how that’s affected you. Has your gym membership gone up? What about the cost of rent? Maybe you’ve noticed a price jump at the grocery store. Don’t be afraid to talk about those costs, and how your current salary isn’t providing you with the same standard of living that it used to. Stories work.