Are YOUR wages passing inflation? Mine aren't!

[Zak33]

Lo people.

I'm genuinely surprised by this statement!

http://www.bbc.co.uk/news/business-27010326

Wages are set to rise by more than inflation for the first time in almost six years, says an economic forecaster.

Now, frankly I dont' see that tbh.

Inflation still feels relatively strong in essentials like bread, diesel, milk etc.

And my salary has certainly not moved up.

So,,... where does this Economics forecaster get off the train?

[herulach]

Well, averages being what they are, knocking on for 50% won't have seen an increase, for my part they are, but thats mostly due to a couple of promotions rather than normal year end increases.

[cptwhite_uk]

No pay rise since July 2008, and temporary pay cuts of 10%, 20% and 10% since then, and a freeze on employer pension contributions (upto 8% matched) since 2009, and I was just made redundant thanks to a cash strapped parent company (my department will continue trading)....and many people I know are in very similar positions, I guess I don't need to state my thoughts on this.

[Saracen]

The clue is in the "set to" bit, Zak, not "have".

For years, economic figures have shown wage growth as minimal at best, often zero or even negative. At the same time, inflation had gone up significantly over the rates it had been for some years, though still well short of historical highs.

What's happening now is two-fold. Some of the international pressures on prices have eased, meaning that inflation rates have dropped back to below BofE targets, AND there are signs showing that the economy has recovered to the point where wages are expected to rise.

But be warned. Just because wages are expected, over the course of this year, to rise faster than prices, doesn't mean everybody's will. Nor does it mean they will shoot ahead.

And, just because the economy is growing doesn't mean our troubles are over, or that everything economic is sunshine and roses. The signs are good, but for a reasonable rate of recovery, and it's too early to start planning the party. Austerity is not over, far from it in fact.

But, in general, we should find the pressures of the last few years easing over the course of the year. That feeling that it's harder and harder, month by month, should ease. But don't expect massive wage rises, or huge improvements in standards of living. If the forecasts are right, and I stress "IF" the forecasts are right, we will all start to feel a little better off. But, forecasts have been known to be wrong, and some supposedly respectable ones, like the IMF, that were very pessimistic just a few months ago, are now saying "we got it wrong". Well, they could be wrong again.

If the basis of our current recovery is mainly consumer spending, then in the absence of growth, that is coming from either savinfs, or debt. Neither are sustainable for long. If a more sustainable recovery, based on production, exports, etc, follows, then great. But if it doesn't, then everything could yet falter.

In other words, forecasts of wages exceeding inflation are just that - forecasts. And even then, the amount it will exceed inflation by is pretty modest. It's good news, but not great news,

[0iD]

In my preferred profession these days wages have been under inflation for may years so the absolute demoralisation of the workforce TBH.

[Dooms]

I'm a dirty contractor so my rate has not changed but then again I'm overpaid anyway.

[g8ina]

Wages ? Wossat then ?

Now if it was benefits yer on about .......

[jim]

I don't think I'll find out if I'm getting a salary increase for a while yet, but there wasn't even a penny last year so I think our chances are good this year.

[Zak33]

set to...

hmm......

set to......

If I were a boss, running a companyt with staff, I'd possibly not like the thought of anything like salary being "set to" inflate faster than I'm likely to inflate the price of the service I sell

[Zak33]

Poll Currently is

12 no
2 not sure
2 yes

[Phage]

Laid off three times since 2008. Now - back contracting.
Day rate is higher than wages, until you subtract holidays, sick leave, pension, insurance etc. Then it's lower !

[Dooms]

Laid off three times since 2008. Now - back contracting.
Day rate is higher than wages, until you subtract holidays, sick leave, pension, insurance etc. Then it's lower !

Depends. When on contract I only take a day here or there for holiday, I'm barely sick at all (2 days last year) and don't do pension or insurance so I'm quids in for the short term. As I get older though I need to start thinking a bit further a head but that can wait a few more years of having fun and travelling between contracts

edit: The killer is like this weekend... 2 days forced no pay due to these damn bank holidays!

[Phage]

Aye - I'm approaching my 50th

[Saracen]

set to...

hmm......

set to......

If I were a boss, running a companyt with staff, I'd possibly not like the thought of anything like salary being "set to" inflate faster than I'm likely to inflate the price of the service I sell

Agreed. But it's a forecast, of the economy as a whole. By definition, some will be higher, and some lower. And it's not necessarily about the price of what businesses sell, but about profits. At least up to a point, firms can increase profit without a corresponding increase in labour costs, not least because labour usually isn't the only input cost, and often not even the biggest. For example, if wages are 5% of costs, and you sell a lot more volume, you can afford to pay it and still see profits go up.

[j1979]

This graph is from American statistics, but I suspect it's the same or worse in the majority of developed countries. Norway has a better record, but stuff is expensive there.



source
http://www.theatlantic.com/business/...graphs/282193/

[wasabi]

Doesn't really work for me as low interest rates mean the mortgage is negligible. Means in real terms I'm okay at the mo even though effectively my salary has dropped almost 6 percent in the past 3 years.