I see this sentiment often, but I don't quite understand. Inflation has been at <2% for a while, so how is a 5% raise cost of living? It's actually big.
I'm in NYC and our trouble with the subway have highlighted that MTA workers get a standard 6% raise each year as cost of living. But, it's way more than that, and it's actually a salary doubling every 11 years or so, which is not at all in line with overall wage growth - it's huge.
Sure, in tech you can jump jobs every 3 years for 20% jumps (until you're 40), but that also isn't reflective of normality and definitely front-loads early career experiences.
> On November 18, 2017, The New York Times published its investigation into the crisis, with over 1,000 readers having submitted stories about the effects of the past year's subway delays. It found that politicians from both the Democratic and Republican parties, at the mayoral and gubernatorial levels, had gradually removed $1.5 billion of MTA funding. ...
> The New York Times described MTA funds as a "piggy bank" for the state, with the issuance of MTA bonds benefiting the state at the MTA's expense.[16] By 2017, a sixth of the MTA's budget was allocated to paying off debt, a threefold increase from the proportion in 1997. The city's $250 million annual contribution to the MTA budget in 2017 was a quarter of the contribution in 1990.
> This lack of funds was not only due to the gradual reduction of funding. Other actions by city and state politicians, according to the Times, included overspending; overpaying unions and interest groups; advertising superficial improvement projects while ignoring more important infrastructure; and agreeing to high-interest loans that would have been unnecessary without these politicians' other interventions.
I fail to see how any of that has any impact on the fact that the workers get a 6% raise per year as cost of living. That's higher than how much cost of living increases per year in NYC.
While what you said is interesting to read, none of it speaks to that point.
I have not been able to verify the 6% raise per year. What I have been able to find is that the raises from 2010 to 2017 have been in 2-4% range. Here are my sources:
> The contract for thousands of New York City transit workers expires in a few days, and union officials negotiating a new deal with the MTA are seeking salaries on par with other divisions the agency operates.
> The 44,000 transit workers affected by the collective bargaining agreement that expires Jan. 15 are hoping to receive more than the existing 2 percent pay increase,
> A deal reached between the MTA and the Transport Workers Union will give unionized subway and bus employees 8 percent raises over five years — while sparing riders fare hikes.
> “We have a fair wage settlement but most importantly, no impact on fares,” said MTA boss Thomas Prendergast.
> Transit workers will get retroactive pay hikes of 1 percent for 2012 and 2013, followed by 2 percent increases in 2014, 2015 and 2016.
> Despite recent fare hikes and the punishing recession, transit union officials argued that they deserve a 12% hike over three years, partly because city employees have received similar increases.
What is your source for a 6% raise per year? Is it for one year, or over a period of multiple years? Does it include a retrospective raise for a year where there was no salary increase? Does it include an increase in employee contributions to, for example, retirement or health care?
In any case, if it is 6% increase per year then it sounds like the union did a great job in negotiating, compared to previous years where they only managed to get 2-4% increases.
Wouldn't you want to have union representation which is that effective for your job? I would.
The big idea is that it's unlike e.g. MTA workers because in tech, after 3 or 5 years, you're not really doing the same job.
If you've been hired as a junior dev, then the work that you're doing in year 5 is (or should be) worth much, much more that what you were doing in year 1.
What people are expecting isn't a "I'm a bit more effective at my position and have some institutional knowledge, so I'd deserve a bit of a raise", but rather "I was hired at position X. Now I'm de facto doing position Y, so I deserve a salary appropriate to that position", and the appropriate salary to that new position may be 30%, 50% or 100% larger than the initial one. If your company doesn't provide these internal promotions (and the salary jumps appropriate for each tier), then your best people will take "lateral promotions" to other companies whenever they're ready to promote.
You won't hire a senior dev by offering 20% more than a junior dev; so as a junior dev in your company becomes (over the years, and of course not all of them do) a senior developer, if their real (inflation adjusted) salary increased only by 20% over these years, that's not reasonable.
I mean, it should be reasonable for a young person coming to your company at an entry level job to ask about the career path available. In tech (unlike, for example, fast food) they can start with an assertion that as they gain experience, in ten years they would like to earn double of what they'll be earning now as an entry level developer. It's not a given that they'll succeed, but it's likely, and a realistic plan to achieve if they put in the work. And your company (assuming it's large enough) should have an answer about what's the career path and criteria for them to double their (inflation-adjusted) salary in that time, and raises that are 2-5% (so, a bit above inflation) don't provide such an answer.
CPI and RPI don't always reflect real world inflation (don't include housing costs) and they are subject to gaming by the Government by tweaking what is included in the basket of goods.
This is UK based from an off the record briefing from a ONS staff member.
housing, healthcare, food, clothing. How the CPI works is that necessities are mixed with nice to haves. Like large TVs and smartphones. LCD TVs price is down, smartphones price is down (and they will include things like size of the TV or speed of the smartphone to proof it's cheaper even when it isn't). Healthcare prices are tremendously up, food prices are up, yes housing prices are up, they have been going up for 10 years. And the salaries are the same. CPI is an useless metric. If my health insurance was 500 bucks and is 1300 bucks, childcare was 1,100 usd and is 1,500 usd -- what do I care about LCD TV being down? Or being able to get 5 times faster smartphone for the same price compared to 3 years ago?
In the USA the middle class and white collar (middle upper class) now too -- are getting poorer by the year.
I'm in NYC and our trouble with the subway have highlighted that MTA workers get a standard 6% raise each year as cost of living. But, it's way more than that, and it's actually a salary doubling every 11 years or so, which is not at all in line with overall wage growth - it's huge.
Sure, in tech you can jump jobs every 3 years for 20% jumps (until you're 40), but that also isn't reflective of normality and definitely front-loads early career experiences.