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Inflation And Your Salary Hikes



Not to blame the pandemic, but 2020-21 did bring out a dip in all our finances. People across sectors were praying that they do not lose their job, in such a scenario, asking for a salary hike or a promotion was unthinkable for many.

In fact, even now in 2021-22 the employment rate among Indian youth (15-24 years) stands at 10.4%  as compared to 10.9% in 2020-21. This is much lower when compared to the World Bank estimates of 23.2% for 2020.

According to CMIE, the employment rate among the youth in 2016-17 was 20.9% which fell to 17.9% in 2017-18, to 15.5% in 2018-19 and to 14.7% in 2019-20. Source 

"The urban unemployment rate is usually higher at about 8% than the rural unemployment rate, which is usually around 7%. In August the urban unemployment rate shot up to 9.6% and rural unemployment rate also increased to 7.7%," CMIE managing director Mahesh Vyas told PTI. Source 

And while these numbers do keep fluctuating every few month, the rising numbers of unemployment with a few periodical dips is a matter of concern.

However, what I wanted to talk about today was the inflation and what the corporate sector is doing about it.

 Price-tags of daily groceries from oil to rice and hair oils have risen between 10% and 22% since January. The average retail prices of rice, wheat and atta have increased by 8-19% in the past one year, according to the government data. Source Source  

Safe to say that everyday life is getting expensive. In Mumbai, the base price of cabs and rickshaws were also hiked, the mobile phone tariffs were revised a few months ago as well, so even other things like commute and communication is getting expensive.

And yet, come appraisal season, we are in a cut-throat competition to prove our worth and secure that hike. While reports state that hikes this year will be to the tune of around 10%, only time will tell if this stands true, as several corporate are already indicating that giving higher increments would be an issue as they too are facing the inflation woes. Source

Keeping all of the above in mind, I could easily do a post on the lines of ‘5 ways to ensure you get a promotion this year’ but I shall not.

I would for a change like to flip the table and ask the management if they are taking any pro-active steps to ease the financial pressure on their employees? Shouldn’t it be their responsibility too? The corporate sector was all gung-ho during the pandemic because everyone was working from home and thus commute costs should be deducted from the salary (Thankfully this idiotic idea didn’t see the light of the day), even now, they are not too keen on moonlighting. So if they are curbing all the ways of earning a bit extra, why not help the employees meet their ends as well, especially when the cost of living is sky-rocketing anyway?

We often hear HRs talk about how important employees are to the company and all those flowery words. But come appraisal time, all these big statements fall flat on their face.

It’s not that I am only questioning the employers, I am saying this is a constitutional failure, and employers are just the first ones in the long time of people to be questioned.

Why are we not able to control our inflation? Why are we not able to provide more employment? Why is the gig economy only witnessing a boom in the urban areas? Why are we not able to increase the per capital income of individuals in the country?

Comments

  1. To control inflation and a lot of our economic problems we have to increase our earnings.
    It is tough.
    Most of us take a decision. But Ratan Tata takes action and implements the action and makes it a right decision.
    I wish we are like that.

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  2. We are all struggling with the cost of inflation, the pandemic, the war in the Ukraine, are the main reasons. Creating a stable economy is not an easy task after two difficult years. Governments are not in a position as yet to make empty promises, much less employers..

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  3. I received a 5% raise this year. It is not enough to keep up with inflation, but luckily I do not spend much, and I have been able to keep my costs under control by making a few changes.

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    Replies
    1. That is the best employees can do at the moment. Thoughtful consumption, reduced spendings and increased savings is necessary

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  4. Very thought-provoking blog post. I cannot speak for the Indian companies. I have spent my entire adult life in USA. I can speak for only U.S. companies. Also, I am in a senior management position for a large U.S. corporation.

    Here, management is taking pro-active steps for the financial wellness of their employees. As per Bank of America’s “2020 Workplace Benefits Report”, 62% of employers feel extremely responsible for their employees’ financial wellness. They want to help improve employees’ financial wellness as they experience more stress due to Covid-19 pandemic.

    Here is a real incident that happened (kind of tongue-in-cheek). President Reagan was asked about 10% unemployment in the country. He replied: I am happy 90% are employed.

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    Replies
    1. Employers caring about the financial wellness of their employees is unheard of here. Maybe a few new-age start-ups may take into consideration

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  5. Great post Pooja. There are very important questions and things to think about here.

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  6. Ah very interesting!

    Allie of
    www.allienyc.com

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  7. Here in Denmark, the prices of everyday items I have been rising too like milk and eggs. Meat is so expensive too. However, it doesn't seem like companies are doing much to help their employees with the increase in cost of living

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  8. I leave everything to free market. Inflation corrects by itself based on demand and supply.
    Thanks for visiting and commenting on my blog. Much appreciated!

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  9. If we note down all our expenditures in a month, we will know all the wasteful things we are spending money on. Curbing those, I feel, is the best way to beat inflation.

    ReplyDelete

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