Pay keeping up with inflation for your job?

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Pay keeping up with inflation for your job?

Postby Polar_Ice » Wed Jul 17, 2013 12:35 am

I have worked for a government contractor for ~10 years and was curious to see how my pay has kept up with inflation. When I compared my pay now to when I first started and checked inflation during that same period, I am barely keeping up with inflation. If you factor in total compensation, I am 7-8% below inflation due to losing some retirement benefits a couple of years ago. Also factoring healthcare premiums I figure I am making ~12-13% less then I did when I started. I had a performance review the first year I was hired and have not had one since. Starting to think I might look to move on or change careers due to lack of growth opportunities but enjoy my job in a lot of ways. I just found out I am not going to get a raise for the 3rd year in a row.

So what do you think is acceptable for raises/pay vs. inflation? Wondering how others pay has/hasn't keep up with inflation?
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Re: Pay keeping up with inflation for your job?

Postby cheesepep » Wed Jul 17, 2013 3:02 am

It depends on your age and your family. If your job is stable and you have no need to move elsewhere and have a family, stay with your job. Find a side job if you need more income or politely ask for a raise.

For me, I also have not had a raise for a while, but am OK with it because I have found other sources of income (investing, part-time job, etc).
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Re: Pay keeping up with inflation for your job?

Postby 168gr » Wed Jul 17, 2013 3:05 am

Polar_Ice wrote:So what do you think is acceptable for raises/pay vs. inflation?


Acceptable is kind of a vague word. Do you mean acceptable is "good enough for me to not quit and go work elsewhere" or simply "fair"? Good enough depends on you. Fair depends on whether or not the value of one's work has increased, and the financial health of one's employer, and what your contract says.

I work two jobs. My contract at one has certain longevity raises written into it, and very specific pay incentives based on professional qualifications and actual work done. My contract at the other does not. Both are acceptable to me.
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Re: Pay keeping up with inflation for your job?

Postby Bacchus01 » Wed Jul 17, 2013 8:45 am

Private sector executive here. Have risen through the ranks quite well over the last 15 years. Have relocated 4 times, however.

My CAGR of base pay since I graduated college has been just under 15%.

Yes, it's outpacing inflation by a large amount. This last year, however, was the smallest raise I've ever received at just 3%.
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Re: Pay keeping up with inflation for your job?

Postby Andyrunner » Wed Jul 17, 2013 9:00 am

Old job at a publicly traded major corporation. Employer didn't give pay raises to keep up with inflation, only gave performance based raises, nothing inflation based. I think over 4 years my pay went up about 2%, then again this was 2007-2010 timeframe.

New job, private employer, the employer really watches out for the employees, and I have seen my pay raises exceed inflation, almost like they are trying to 'flex their financial muscles' to keep the best employees and show their financial strength.
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Re: Pay keeping up with inflation for your job?

Postby Ice-9 » Wed Jul 17, 2013 9:03 am

I just got my first raise in 4 years. It was 10% and came with a promotion. :sharebeer After reading the OP's post, I visited the BLS inflation calculator, entered the amount of my 2009-2012 salary for year 2009, and discovered the 2013 equivalent amount is only slightly lower than my new salary. Not complaining at all, just found that interesting.
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Re: Pay keeping up with inflation for your job?

Postby Hayden » Wed Jul 17, 2013 9:19 am

Many government contractor pay rates are set by the government. The ones I am personally aware of have not increased in three years. The way to get a pay increase as a government contractor is to get a promotion to a higher labor category.
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Re: Pay keeping up with inflation for your job?

Postby Grt2bOutdoors » Wed Jul 17, 2013 9:23 am

Andyrunner wrote:Old job at a publicly traded major corporation. Employer didn't give pay raises to keep up with inflation, only gave performance based raises, nothing inflation based. I think over 4 years my pay went up about 2%, then again this was 2007-2010 timeframe.

New job, private employer, the employer really watches out for the employees, and I have seen my pay raises exceed inflation, almost like they are trying to 'flex their financial muscles' to keep the best employees and show their financial strength.


The difference - the publicly held corporation has many taskmaster for whom they must answer to - the shareholder.
The private employer answers to no one but themselves and is usually to reinvest in the business including it's workers.
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Re: Pay keeping up with inflation for your job?

Postby Andyrunner » Wed Jul 17, 2013 9:30 am

Grt2bOutdoors wrote:
Andyrunner wrote:Old job at a publicly traded major corporation. Employer didn't give pay raises to keep up with inflation, only gave performance based raises, nothing inflation based. I think over 4 years my pay went up about 2%, then again this was 2007-2010 timeframe.

New job, private employer, the employer really watches out for the employees, and I have seen my pay raises exceed inflation, almost like they are trying to 'flex their financial muscles' to keep the best employees and show their financial strength.


The difference - the publicly held corporation has many taskmaster for whom they must answer to - the shareholder.
The private employer answers to no one but themselves and is usually to reinvest in the business including it's workers.


Agreed. Which is why I left the publicly held corporation.
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Re: Pay keeping up with inflation for your job?

Postby SpecialK22 » Wed Jul 17, 2013 9:37 am

Hayden wrote:Many government contractor pay rates are set by the government.


I'm only aware of the government setting a minimum wage. I'm not aware of any contracts which would prohibit a government contractor from paying employees more than the specified minimum wage in the contract.
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Re: Pay keeping up with inflation for your job?

Postby Hayden » Wed Jul 17, 2013 9:48 am

SpecialK22 wrote:
Hayden wrote:Many government contractor pay rates are set by the government.


I'm only aware of the government setting a minimum wage. I'm not aware of any contracts which would prohibit a government contractor from paying employees more than the specified minimum wage in the contract.


True, however, many contract bids these days are Lowest Price Technically Acceptable. What that means, in practice, is that if you pay your employees more, you will lose the rebid because other companies will bid the wage rate specified in the contract.
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Re: Pay keeping up with inflation for your job?

Postby nisiprius » Wed Jul 17, 2013 10:22 am

From about age thirty to my early sixties, when I semiretired, overall my real salary about doubled. However, it was very irregular. Typically the annual raise was equal or very slightly greater than inflation, but it was punctuated with occasional biggish raises (and one 10% across-all-employees pay cut when my employer hit a rough spot, but they kept their promise to gradually raise it back). The biggest raises did not occur when I changed jobs, but were two or three years into a new job.
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Re: Pay keeping up with inflation for your job?

Postby ofcmetz » Wed Jul 17, 2013 10:30 am

Polar_Ice wrote:So what do you think is acceptable for raises/pay vs. inflation? Wondering how others pay has/hasn't keep up with inflation?



I'm working in a state job that has canceled all merit increases and raises for the last 5 years. Only way that I have kept up with inflation was to work a little more overtime each year. Although there is no way I will come close to last years total unless we get hit by more than one hurricane this year. I've taken a hidden 10% or so pay cut and it depresses me some to think about this.

I would be very happy to just keep up with inflation. :D
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Re: Pay keeping up with inflation for your job?

Postby Default User BR » Wed Jul 17, 2013 1:08 pm

At MyMegaCorp, we have a yearly review and "merit raise" process for salaried people. The average raise tends to be right about inflation level. So if your overall review is "meets expectations" you'll probably keep up with inflation. Worse, then you don't. Better, then you exceed.

The company tends to feel that managers like to rate everyone about average. Upper management always pushes for more "differentiation".


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Re: Pay keeping up with inflation for your job?

Postby IlliniDave » Wed Jul 17, 2013 2:00 pm

By my estimate at a largish publicly-held corporation I've had real salary growth of about 1-1.5% over the last 6 years. I'm a relatively high-level technical individual contributor fast approaching age 50 so I'm okay with that, as my income is substantially above my day-to-day needs and I'm on course for early retirement at a lifestyle I'm comfortable with.

You really have to evaluate your individual overall situation. Since you derive positive non-monetary value from your job, it's a matter of weighing that contribution to your quality of life to how well your able to meed you financial goals. There's no one-size-fits-all right answer.

I've been with the same company since I graduated college (I have had to move 3 times along the way) and have done okay, salary nominal "internal rate of return" has been about 6.9% over 26 years. Many of my colleagues have changed companies multiple times to accelerate their pay. I don't know how they compare to me, but the conventional wisdom in my line of work is that job-hopping is the best approach to increasing one's income. I'm satisfied with how I've done staying the course, but I get the sense I've been luckier than most who attempt that path.
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Re: Pay keeping up with inflation for your job?

Postby Luke Duke » Wed Jul 17, 2013 2:26 pm

My salary has increased an average of 4.61%/yr since I entered the workforce in 2001. My annual raises have ranged from 0-10%.
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Re: Pay keeping up with inflation for your job?

Postby Polar_Ice » Wed Jul 17, 2013 3:12 pm

168gr wrote:
Polar_Ice wrote:So what do you think is acceptable for raises/pay vs. inflation?


Acceptable is kind of a vague word. Do you mean acceptable is "good enough for me to not quit and go work elsewhere" or simply "fair"? Good enough depends on you. Fair depends on whether or not the value of one's work has increased, and the financial health of one's employer, and what your contract says.

I work two jobs. My contract at one has certain longevity raises written into it, and very specific pay incentives based on professional qualifications and actual work done. My contract at the other does not. Both are acceptable to me.


Good point. I am most interested in the going rate and what is fair. The contractor has obviously been slowly cutting benefits the last 4-5 years to save money since they could due to the slowly of jobs in the public sector. The only wage increases I get are based on a wage determination for our county this is published once a year.
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Re: Pay keeping up with inflation for your job?

Postby tetractys » Wed Jul 17, 2013 3:25 pm

Within the US at least, it all depends on where you are in wage classification. Lower classes have regressed quite a bit over the last several decades or so. Upper classes have seen raises far exceeding inflation. For the middle class, being in a strong union amongst the corporate gambit of right to work laws has helped to keep wages near to inflation for some; but generally, the middle class is not keeping up with inflation. Isn't this all common knowledge?

Some sources:
http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States
http://en.wikipedia.org/wiki/Real_wage

Best regards, Tet
Last edited by tetractys on Wed Jul 17, 2013 3:37 pm, edited 2 times in total.
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Re: Pay keeping up with inflation for your job?

Postby DVMResident » Wed Jul 17, 2013 3:32 pm

ofcmetz wrote:I would be very happy to just keep up with inflation. :D


+1 Working at a public university, I had one 2% COLA since 2009, removal of the 3% employer match on 403(b), and decreasing employer coverage of benefits. Without breaking out an Excel sheet, I ball park my total compensation is down 3 to 5% from my hire date on a nominal basis. Luckily my 'critical' function department avoided the furloughs (while most others employees received a 5% pay cut for 2 years). When factoring inflation, it's rather depressing. I plan on leaving my employer by 2014/2015 and possibly leaving the field if funding doesn't improve.
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Re: Pay keeping up with inflation for your job?

Postby leonidas » Wed Jul 17, 2013 4:11 pm

My salary and bonus peaked in 2008. Since then I have averaged about 13% less. From 2000 until 2008 I averaged about 5% per year.
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Re: Pay keeping up with inflation for your job?

Postby jeffyscott » Wed Jul 17, 2013 10:11 pm

No increases in past 4 years and since then a 9% decrease in take home pay due to benefit cuts. The 9% cut probably equaled the prior 4 years of pay increases. So effectively a nominal net of about 0% for 8 years.

This year it's a 1% increase to be soon followed by a 0.35% give back.
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Re: Pay keeping up with inflation for your job?

Postby nedsaid » Wed Jul 17, 2013 10:24 pm

So far, so good. The raises have been getting skimpier though.
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Re: Pay keeping up with inflation for your job?

Postby Colorado13 » Thu Jul 18, 2013 9:02 am

I received a 4.2% raise yesterday, effective for the upcoming year (our fiscal year begins in July.) Doubled my salary from age 30 to 45, mostly by moving from low wage/low COL to higher wage/higher COL location.
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Re: Pay keeping up with inflation for your job?

Postby bottlecap » Thu Jul 18, 2013 9:19 am

Nope. Salary is going backwards after accounting for inflation, not to mention an increased share of healthcare costs.

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Re: Pay keeping up with inflation for your job?

Postby XtremeSki2001 » Thu Jul 18, 2013 9:55 am

I graduated in 2006 and my CAGR is ~11%
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Re: Pay keeping up with inflation for your job?

Postby jeffyscott » Thu Jul 18, 2013 2:00 pm

jeffyscott wrote:No increases in past 4 years and since then a 9% decrease in take home pay due to benefit cuts. The 9% cut probably equaled the prior 4 years of pay increases. So effectively a nominal net of about 0% for 8 years.

This year it's a 1% increase to be soon followed by a 0.35% give back.


Longer term details, with the same job for 28 years...in my first 6 years, my pay about doubled with no give backs in benefit funding, inflation was about 27% over that time frame.

Over the subsequent 22 years, it has yet to double again...currently at about 85% gross nominal increase with inflation of about 71%. After accounting for recent give backs in benefit funding, it's more like 70% nominal net...so basically just about equal to inflation.

Note that the cost of health benefits has gone up dramatically, for both me and my employer. When I started family coverage total premium was about $200 per month, now it is about $1800 per month. If health care had matched general inflation the premium would be only about $435 today.

Looking at it another way, over 28 years my pay has gone up by a factor of about 3.5 to 4, while health care insurance cost has gone up by a factor of about 9.
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Re: Pay keeping up with inflation for your job?

Postby donaldfair71 » Thu Jul 18, 2013 11:50 pm

No. I got my first raise in 3 years last year, 2%, getting another 2% in September.

But I'm a high school teacher outside DC, and with federal furloughs and the general economy having been down, I'm not complaining. Many of my colleagues not too far from me had to take pay cuts in the last 5 years. I understood it could happen when I signed up for the job, and the freezes have helped preserve some other benefits.

What does upset me is that our match went from 5% to 2% in our 403b. Bothers me more than the freezes. We will get bigger raises when the economy picks up. I have the feeling that the 5% match is gone forever.
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Re: Pay keeping up with inflation for your job?

Postby scubadiver » Fri Jul 19, 2013 8:31 pm

Started my first "real" job in May 2001. Since then my salary has increased 135%, about 7.4% per year. I'm guessing that's much better than inflation. I'm also guessing I will not be able to maintain that trend over the next 12 years.
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Re: Pay keeping up with inflation for your job?

Postby jollystomper » Fri Jul 19, 2013 9:36 pm

My peak Salary + Bonus year was 2002. Since then my base salary has only gone up about 5%, though there have been years when bonuses brought it up close to that 2002 peak. So from that standpoint, my pay hasn't caught up with inflation. However, since we live very comfortably well below my salary level it has not affected us.
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Re: Pay keeping up with inflation for your job?

Postby Kosmo » Fri Jul 19, 2013 10:36 pm

Since I started my job exactly 8 years ago to the day (that's 2005, for the mathematically challenged), I've had an annualized pay increase of 5.24%. The bigger jumps came through 2 promotions. The 2 most recent annual pay increases have been less than 3% though...
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Re: Pay keeping up with inflation for your job?

Postby skylar » Sat Jul 20, 2013 12:19 am

Over 7 years, my pay is only about 20% higher than when I started, despite having much more experience and maturity (one of my main responsibilities has grown in size 100x over those seven years, with corresponding increases in complexity). We've been under a wage freeze for going on five years now, though, during which my boss pulled off some heroics to get my team some raises, but that was over three years ago now. We might have some hope of raises this year, but who knows. All in all, it's a fun, exciting job, but my pay is barely keeping up with inflation (not to mention increasing health care premia, co-pays, etc.).
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Re: Pay keeping up with inflation for your job?

Postby Bacchus01 » Sat Jul 20, 2013 12:21 am

Bacchus01 wrote:Private sector executive here. Have risen through the ranks quite well over the last 15 years. Have relocated 4 times, however.

My CAGR of base pay since I graduated college has been just under 15%.

Yes, it's outpacing inflation by a large amount. This last year, however, was the smallest raise I've ever received at just 3%.



I went back and looked at this. When looking at total comp, I had a big jump in 2006 but then it actually was pretty much flat through 2010. I took a new job with a new company in 2010 and got another big jump. But, since 2010, my total comp has been down to slightly decreasing.

Hmmm....Sounds like time for a new job.
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Re: Pay keeping up with inflation for your job?

Postby RobInCT » Sat Jul 20, 2013 10:36 am

My salary has gone up about by about 30%, accounting for inflation, over the last 5 years primarily due to the effects of promotions. However, overall compensation in my field is has not kept up with inflation. New hires now make 15% less in real terms than they made in 2006, 20% less than they made in 2001. Basically, people starting out now make the same dollar amount as people starting out 10-15 years ago.
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Re: Pay keeping up with inflation for your job?

Postby Kenneth » Sat Jul 20, 2013 12:08 pm

I accepted a substantial pay cut in 2009 as the company I previously worked for went bankrupt. Since then, I've worked for two other companies and my pay has not increased at all; this, despite my annual performance reviews indicating "exceeds expectations."

EDIT: At my company, my situation is not unique; raises have been non-existent.
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Re: Pay keeping up with inflation for your job?

Postby Call_Me_Op » Sat Jul 20, 2013 12:29 pm

I would bet my experience is all too common. I have consistently been a "top performer" in my engineering job, which I have held for nearly 30 years. In my early years, my raises were huge (double digits). As I got older, even though I was more experienced, my raises got smaller and smaller, eventually just barely keeping pace with inflation. The past two years, I have had small lump sums but no increase in salary. I make a decent salary, but the slope keeps getting smaller as I get older.
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Re: Pay keeping up with inflation for your job?

Postby KyleAAA » Sat Jul 20, 2013 12:41 pm

My CAGR over the last 9 years is almost exactly 7% per year in real 2013 dollars. Not bad. I'm starting to reach the point in my career where raises will probably slow down a bit unless I make significant career changes. This is only income from my day job, though, and doesn't include side income. Overall, I guess I can't complain about 7% real considering half my career has been defined by the great recession.
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Re: Pay keeping up with inflation for your job?

Postby Ricola » Sat Jul 20, 2013 1:28 pm

You shouldn't be surprised, its common knowledge that U.S. wages have not increased since the 70's.

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Re: Pay keeping up with inflation for your job?

Postby sudo_su » Mon Jul 22, 2013 5:20 pm

Since completing my undergraduate degree in 2009, my current annual salary is nominally 66% more than my first year's.

I am curious, though: how does one calculate CAGR on income?

Using a fictitious numbers, I can think of a few ways, none of which seem right.

Code: Select all
Dates and Salary
6/1/2009    $50,000
8/1/2009    $60,000
1/1/2010    $62,000
1/1/2011    $68,000
1/1/2012    $71,000
7/22/2013   $-75,000

XIRR: ~-40%


Code: Select all
First/Last Dates and Salary
6/1/2009    $50,000
7/22/2013   $-75,000

XIRR: ~10%


Code: Select all
Dates and Salary Differences
6/1/2009    $50,000.00
8/1/2009    $10,000.00
1/1/2010    $2,000.00
1/1/2011    $6,000.00
1/1/2012    $3,000.00
7/22/2013   -$75,000.00

XIRR: ~1%
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Re: Pay keeping up with inflation for your job?

Postby 555 » Mon Jul 22, 2013 5:43 pm

No pay raise in five years.
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Re: Pay keeping up with inflation for your job?

Postby AustenNut » Wed Jul 24, 2013 4:26 pm

I am a public school teacher and this is the fourth year in a row that our salary has been frozen (i.e. we don't even go up $500/year for the additional year of experience). They've also cut back on programs where teachers could work extra hours (after-school tutoring, etc), so pay has gone down from that as well.
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Re: Pay keeping up with inflation for your job?

Postby ofcmetz » Fri Jul 26, 2013 6:43 pm

Well, my state employer just announced that we will receive up to a 4% raise this fiscal year. :D So after almost five years, perhaps I will be keeping up with inflation this year after all.
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Re: Pay keeping up with inflation for your job?

Postby 555 » Fri Jul 26, 2013 7:01 pm

ofcmetz wrote:Well, my state employer just announced that we will receive up to a 4% raise this fiscal year. :D So after almost five years, perhaps I will be keeping up with inflation this year after all.


Watch out for those weasel words.
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Re: Pay keeping up with inflation for your job?

Postby ofcmetz » Sat Jul 27, 2013 2:14 am

555 wrote:
ofcmetz wrote:Well, my state employer just announced that we will receive up to a 4% raise this fiscal year. :D So after almost five years, perhaps I will be keeping up with inflation this year after all.


Watch out for those weasel words.



The "up to" has been the source of many jokes at work tonight. We have been speculating on how small it could be while still meeting the stated criteria. :oops:
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Re: Pay keeping up with inflation for your job?

Postby dickenjb » Sat Jul 27, 2013 8:47 am

sudo_su wrote:Since completing my undergraduate degree in 2009, my current annual salary is nominally 66% more than my first year's.

I am curious, though: how does one calculate CAGR on income?

Using a fictitious numbers, I can think of a few ways, none of which seem right.

Code: Select all
Dates and Salary
6/1/2009    $50,000
8/1/2009    $60,000
1/1/2010    $62,000
1/1/2011    $68,000
1/1/2012    $71,000
7/22/2013   $-75,000

XIRR: ~-40%


Code: Select all
First/Last Dates and Salary
6/1/2009    $50,000
7/22/2013   $-75,000

XIRR: ~10%


Code: Select all
Dates and Salary Differences
6/1/2009    $50,000.00
8/1/2009    $10,000.00
1/1/2010    $2,000.00
1/1/2011    $6,000.00
1/1/2012    $3,000.00
7/22/2013   -$75,000.00

XIRR: ~1%


The same way you calculate a CAGR on sales growth or the number of yeast cells in a test tube. Or anything else for that matter.

In your example, (75000/50000)^0.25-1

About 10 and a half percent.
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Re: Pay keeping up with inflation for your job?

Postby dickenjb » Sat Jul 27, 2013 8:57 am

Here is a more legitimate link for real wage growth in the US. The Wikipedia link above seems to be based on fabricated data.

http://blogs.wsj.com/economics/2013/07/ ... 009-level/

Looks like no real wage growth in the last 4 years.
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Re: Pay keeping up with inflation for your job?

Postby Valuethinker » Sat Jul 27, 2013 11:47 am

Polar_Ice wrote:I have worked for a government contractor for ~10 years and was curious to see how my pay has kept up with inflation. When I compared my pay now to when I first started and checked inflation during that same period, I am barely keeping up with inflation. If you factor in total compensation, I am 7-8% below inflation due to losing some retirement benefits a couple of years ago. Also factoring healthcare premiums I figure I am making ~12-13% less then I did when I started. I had a performance review the first year I was hired and have not had one since. Starting to think I might look to move on or change careers due to lack of growth opportunities but enjoy my job in a lot of ways. I just found out I am not going to get a raise for the 3rd year in a row.

So what do you think is acceptable for raises/pay vs. inflation? Wondering how others pay has/hasn't keep up with inflation?


Given what the US has been through since 2007 it is hardly surprising if wages for many have not kept up with inflation.

You don't say your age, but it is has been my observation that, from your mid late 40s, income does not keep up with inflation. Your compensation plateaus, and it becomes an increasingly hard fight to *keep* your job, rather than to get pay rises.

Into your 50s your priorities change, too, as you see friends getting ill and sometimes dying around you, or out of work and not able to find work. You see loyalty to organizations repaid with reorganizations, layoffs and outright firings-- often not for performance issues, but being on the wrong side of someone politically or interpersonally. You begin to realize life is finite, and that you are not, on your death bed, going to wish you had spent more time on your career.
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Re: Pay keeping up with inflation for your job?

Postby Valuethinker » Sat Jul 27, 2013 11:48 am

I should probably note here that for the average UK wage earner, they are 6.5% behind in real terms where they were in 2007. If they still have a job that is.
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Re: Pay keeping up with inflation for your job?

Postby pennstater2005 » Sat Jul 27, 2013 12:57 pm

No raise in almost 3 years. I enjoy my job and the people I work with so that has kept me there for now. So, I guess I am not keeping up with inflation.
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Re: Pay keeping up with inflation for your job?

Postby jeffyscott » Sat Jul 27, 2013 2:25 pm

Valuethinker wrote:I should probably note here that for the average UK wage earner, they are 6.5% behind in real terms where they were in 2007. If they still have a job that is.


US median is about -2.7% since 2007, according to this:

http://www.epi.org/blog/real-hourly-wag ... eneration/

Also barely any real gain in 40 years, median up only 3.3% real.
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Re: Pay keeping up with inflation for your job?

Postby squirm » Sat Jul 27, 2013 5:05 pm

The problem when using inflation as the baseline is that inflation changes for different people. For example, if you've recently been looking to buy your first house, you've been hit with a lot on inflation within the past year or so, as in some parts of the country (mine especially) home prices are up nearly 30% in one year, (not to mention property taxes that is based on the purchase price). If you've already bought a house then this huge inflation component isn't a factor.

Another issue is with substitutions. If you're one that doesn't like to substitute, say a quality cut of beef for chicken if the price of beef goes up, then you're hit with higher inflation (the BLS uses substitutions).

In the past we've been able to offset higher inflation by cutting back and cutting corners but there comes a point, where you get diminishing returns on your efforts. I think we've approached that.
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