Workers on the minimum wage should typically get cost-of-living adjustments, because they get a wage and not a real salary.
This is why this is called the minimum wage. They don't get money based on their contribution to the company, but just the amount of money to cover costs, and to be able to show up at work and be healthy the next day. So their wage should increase with inflation.
In some country, the minimum wage is calculated on the minimum amount of money that anyone should spend to keep the economy running. It's a bit more than the amount to still be alive the next day, but the same logic and the adjustment would still apply.
Engineers (which seem to make the bulk of the reader in HN) are usually paid on a market value basis. You negotiate your salary based on your skills, not the price of commodities ! (You can't reasonably complain to HR about the rising price of eggs when you get more than twice the minimum wage).
If you want a raise, get better skills and a better job ! Because you can afford that car even with the inflation. If your market value changes, your salary will also change.
But there is no direct link with inflation.
For example, inflation soars, but layoffs are happening in Cali, so salaries don't go stonk.
EDIT : check out https://en.wikipedia.org/wiki/Minimum_wage#Economic_models ! In a liberal perspective (with supply and demand and stuff), the rising minimum wage doesn't impact the equilibrium, it's just a new line. So whoever was on a equilibrium much above the minimum wage won't be affected ! Only the least paid jobs will be adjusted for inflation (when the minimum wage is over the equilibrium, or close to it)
Salaries are denominated in USD - so a decrease in the value of USD is less than it was. Unless your value to the company also decreases with inflation, then salary should be renegotiated.
Management capitalizes on the difference between the value that is created and how much you're paid. (according to yet another liberal perspective that I don't like). So why would they increase your wage, if other companies are doing layoffs ?
>then salary should be renegotiated.
Yes, but from your perspective, the perspective of unions (or from a Trotskyist perspective where workers create value and collectively decide to share it). Not HR's
I had the "opportunity" to graduate in times when more layoffs were happening than nowadays (covid). And I can tell you how these companies that still hired were accepting the cheapest applicants, instead of sharing the value they would create (I was even hired bellow the minimum wage, because the local government was promoting contracts of 'apprenticeships' as a loophole to not pay engineers who were desperate for a first experience)
I can also tell you how fast I changed jobs and had a dirac of better pay, despite a continuously increasing productivity, just because the job market changed overnight.
So HR doesn't care about your value. They check your market value, and what you would bring to the company for that market value (the difference being their loss or their profits)
They don't pay you because they like you, nor because they like engineering. They need their work to be done, in an efficient and reasonably cheap manner ! (and they would happily pay you a minimum wage or bellow, if that were your market value)
Again, spherical cow !
Right - any employer is going to pay as little as they think they can get away with. As an employee, you have to convince them of two things: that you can make more elsewhere, and that you provide more value to them than your labor costs.
> Yes, but from your perspective, the perspective of unions (or from a Trotskyist perspective where workers create value and collectively decide to share it). Not HR's
Well... at least in the environment that I'm operating in (the US), employment is an arrangement at the discretion of either party. I'm saying that significant inflation is justification for the employee to request modification.
> I had the "opportunity" to graduate in times when more layoffs were happening than nowadays (covid). And I can tell you how these companies that still hired were accepting the cheapest applicants, instead of sharing the value they would create (I was even hired bellow the minimum wage, because the local government was promoting contracts of 'apprenticeships' as a loophole to not pay engineers who were desperate for a first experience)
I'm almost 40, and have been in tech in some form for almost two decades. From my perspective the labor market is cyclical.
The current state isn't nearly as bad as it would appear based on my observations. I'm still getting lots of recruiter spam, and my network is still sharing open positions privately - if anything, that avenue in particular has _increased_ since the pandemic. Yes, layoffs are happening, but companies are still hiring as well. That seems to be doubly true for more experienced engineers.
At the end of the day, everyone has to decide what they'll accept. I know that I would take less compensation to continue working where I am than I'd require if I were to be wooed away to another employer. I know the environment where I work now, and I believe in our "mission". A new employer would represent a significant additional risk to me, and additional compensation would be required to offset that.
> So HR doesn't care about your value. They check your market value, and what you would bring to the company for that market value (the difference being their loss or their profits)
I agree :)
The value I bring to the company is the _upper bound_ to what compensation I could reasonably ask for. My cost to the company is a function of my total compensation.
I don't expect to capture all of that. From my perspective, my employer is enabling me to convert my labor into real value. That service is itself valuable, as I don't have a way to do it on my own at the same rate.
I _do_ expect that inflation will mean that my employer will raise the cost of our product over time - because money is worth less. Some of that increase can be passed on to me, and to other employees that are willing and able to ask for it.
> They don't pay you because they like you, nor because they like engineering. They need their work to be done, in an efficient and reasonably cheap manner ! (and they would happily pay you a minimum wage or bellow, if that were your market value)
Agreed, and I have no issues with that. That's how I _want_ it to work!
I wouldn't be willing to work for less than about 2/3 of what I'm making today, because that's what I can earn completely on my own. Anything over that means employment is the more profitable option for me. At that point, it's a matter of asking:
* am I producing more value for the company than I cost?
* am I able to find a more acceptable arrangement elsewhere?If anything, cost of employing is going down in tech, going up in the service industry
If a business has a 3% profit margin, would you expect them to have a 2% profit margin 5 years from now, and 1% profit margin 10 years from now, and 0.1% profit margin x years from now?