Why Salaries Are Not Increasing Despite High Inflation?

[Good-Guy]

Most of the people who are living in Tier 3 countries know that the conditions of those countries are really bad, unfortunately. I also myself live in a Tier 3 country and in here the situation of economy is really bad and the financial conditions of most of the people is quite saddening. There are several reasons for that. One of the biggest reason is the fact that inflation has been literally damaging the economical growth of the country and pandemic could also be blamed for that. Since the economic conditions can also have a huge impact on the job market, I was expecting a raise in salary for the jobs being offered to the individuals on many social media platforms.

I was browsing a job page where many companies post ads for interested candidates and I was shocked to know that they were offering the same salary packages they were offering several months ago! How is this even possible is just beyond me! If the inflation in the country has increased and prices have increased, the salary of people should also increase at the same ratio! However, this is not happening. This is really cruel. Why do you think this might be happening?

 

[eldavis]

Well they are also trying to spend less themselves, like you said the price cost of things has increased, which means cost of productivity and carrying out of services have increased as well, if they should increase the salary they might end up spending just too much and might not be able to keep up on the long run.

 

[Good-Guy]

Well they are also trying to spend less themselves, like you said the price cost of things has increased, which means cost of productivity and carrying out of services have increased as well, if they should increase the salary they might end up spending just too much and might not be able to keep up on the long run.

Cutting cost does not mean that they should not increase the salaries of people. People are suffering from inflation as well. I am sure that people living in Tier 1 countries got their salaries increased as well because law commands them to do so. Unfortunately, this is something that is not happening in other countries. I have also noticed that many companies are now posting deceptive salary packages. For example, the mention that they are offering $150 as salary, but it is not basic salary. Basic salary is just $100. The other $50 involves allowances expenses and this would only be given to employee when he or she fulfills certain criteria to qualify to get that full salary!

 

[General01]

Increasing salaries is a beautiful idea but that is not the best idea
I think the best way out is by looking for ways to bring down the price of things

I think when the efforts is not only in increasing salaries but it is as well in channeled towards deflation
It might be of great help to the economy and consequently the citizens entirely

 

[btaliat]

Salary is paid based on the tasks you are assigned. So there is no law that says salary should be increased based on the inflation rate. The only time business owners should be considering increment in salary if he increases the prices of his products as well. The best thing is just to look inwards and stop looking for salary job. Because salary is a money paid for someone to forget his dream.

 

[Caramelle]

Increasing salaries will fuel further inflation because businesses will have to increase their prices as well to cope with higher salaries. I don't know how it works in your country but ours imposes a minimum wage that takes into consideration the cost of living in the different regions or provinces. That may not be enough actually because some families are bigger than others which makes it more difficult to survive on a single income. In that case, the family has to be very creative and frugal in order to survive. The actions that we can do to cope in an inflationary economy could include urban gardening, avoiding food wastages, responsible parenthood, and limiting expenditures to the bare essentials. We can help bring down the prices of goods by limiting the demand for those goods.​

 

[Alexandoy]

I think I asked this question to my nephew who is an economist and a college professor. His reply to the issue of the stagnating salary is that inflation is the rising cost of almost everything and it affects the public in general. That means the people suffer and the businesses as well. If the business is not earning good due to the inflation then there is no way that it can increase the salary of its workers. The business is also like the individual that is affected by the cost. Think of the deliveries that the high cost of fuel will affect the revenue due to the higher expenses. That will rebound to the profit which will be smaller.

The hedge to the inflation is an investment that does not depreciate. If you have real estate property for an investment you will be safe from the ill effects of inflation. But with a business the only way to increase the salaries of the employees is to level up with the production and the sales. Other than that all we can do is to persevere in the hard times.