As of 2023 average salary increases are 3 percent lower than the average cost of living increase and inflation rates. The average cost of living in the modern day increases rapidly causing more people to fall under the poverty line every year with worse repercussions. With this cost of living increasing significantly and a lesser growth in wage, we see a decrease in the value of the dollar. As goods rise the cost of the dollar is slowly declining, and the struggle to rise out of poverty becomes increasingly impossible.
Without pay increases or more job availability, post-COVID people struggled to make a living in America, buy a house, or even just own something. Moreover, minimum wage is increasing across America, but states are not forced to increase their minimum wages past the federal wage, this federal wage has not been changed since 2009 causing many states to fall behind. Many states are stuck at around $7.25 while states like Washington increase to a whopping $16.50 minimum wage baseline. This baseline is high because the cost of living in Washington is more expensive, but not two times more. With most employers of companies on the local end giving set amount increases inflation is not a set amount increase for all products. With products and homes increasing almost exponentially as workers’ salaries increase linearly or with set values, local business workers find themselves almost stuck unless they invest or jump jobs to find better salaries. This is considered a good strategy, but jumping jobs and investing are by modern standard, luck based and not sustainable enough for a lifetime job (unless it is with a company who does such). According to Investopedia’s article on Average Raise Percentages, “corporate executives, management, professional employees, and other support workers could expect raises as high as 3 percent while salaries would increase by 2.8 percent for production and manual laborers. The highest salary increases were projected for pharmaceutical employees, to the tune of 3.1 percent. Retail companies projected a 2.9 percent rise in wages. The sectors with the lowest projected increase of 2.4 percent were the oil and gas industry as well as the leisure and hospitality industry.” Small percentages that cannot compare to 2022’s inflation rate of almost 14 percent rise in wages should be yearly and adequate to be in line or more than inflation. Of course, we must look at the fact that 2022 has been the worst year of inflation we have seen. It was years prior with low inflation rates (wavering 3-6 percent) but wage increases for companies were less and barely scraped the surface of the inflation line.
Overall, big and local businesses should fall more in line with other countries outside the U.S., as they pay their workers better wages and do not give tips. Tip amounts are never the same and with wavering pay people may never know if they will have enough money for certain items or amenities. The cost of living in the world is always changing and it is not going down. This is why pay increases need to be increased above inflation or at least in line with inflation rates.