I’m torn in that I think the flip-side makes perfect sense. If there is 1% deflation, why shouldn’t employees’ wages be cut by 1% across the board? At the same time I feel that’s the quickest way to see half your development team leave, even though we’re talking about less than the cost of a nice dinner each month.
In an environment where the market crashes and it dramatically affects revenue for a business, everything has to be on the table, from layoffs to hiring and raise freezes to voluntary cuts in pay (often to save the job). If you make $100k a year at “market rate” and there’s a huge crash, and you’re given the opportunity to cut your own pay to $80k or try to get a job for $60-90k, what do you do? It’s a tough call for anyone.