With inflation raging, which is escalating the costs of everything, you may be thinking about asking ... [+]
With inflation pushing up the costs of nearly everything, you may be thinking about asking for a raise.
With consumer prices spiking over 9%, your paycheck doesn’t go as far anymore. The average American household will have to spend an extra $5,200—$433 a month—just to consume the same goods and services as last year. Here’s the dilemma: It's a reasonable request, but the economy, job market and sentiment of business leaders have shifted.
Why Inflation Will Hurt The Job Market
The job market is likely to soften as the Federal Reserve Bank and the Biden administration withdraw from quantitative easing and trillion-dollar stimulus packages. The goal of Fed Chair Jerome Powell is to crush the economy, in an effort to “whip inflation” (the term used back in the 1970s). In the process of battling inflation, companies will see less business and consequently cut staff.
Also, this time period won’t blow over anytime soon. The last major spike in inflation happened 40 years ago. It lasted roughly from 1965 to about 1982. Paul Volcker, the Fed chairman at that time, took dramatic actions to end the ruinous cycle of rising prices and wages by raising interest rates to 20%.
Your Boss Knows You Won’t Leave As The Job Market Weakens
Your boss and management are in a tough spot. They understand that your expenses are rising at a frightening pace. The supervisors see you as a valued employee who does a great job and they don’t want to lose you. However, their fear of you walking out in the Great Resignation has been lessened. The job market is still relatively strong, but that can all change, as layoffs and hiring freezes are announced daily.
The thought process of management is that if they give you a raise, they’ll have to do it for everyone. They’ll say it's too expensive, especially as their business costs are rising too. The part that’s not said out loud is that they feel the job market will worsen and the odds are high that you won’t jump ship, as you'll be the last one hired and first fired when things go south.
What You Can Ask For Instead Of Money
If you can’t get a pay increase, think of things to ask for that would improve your work life. These include a four-day workweek, shortened workdays, remote and digital nomad options, staggered hours, more vacation and personal time off, relocating to a lower cost location for the same amount of money, stock and stock options, a larger bonus (if the economy does turn around), a higher title and promotion or child-care assistance.
Decide the most critical factors for you, then push for them. If you don’t receive any of these or other benefits, it shows that your company takes you for granted. It's almost as if they are daring you to leave.
Some companies prefer to make life uncomfortable for workers, so they depart of their own volition. With attrition, businesses won’t attract the headlines, touting the number of people laid off. They also may not have to pay severance packages.
If this is the case, start a covert job search. Be careful, as in challenging times, word may get back to your boss, and there could be a chance that you get fired. They’d rationalize the termination by contending that the company needed to rightsize, and since you’ve shown that you want to leave, they’ll gladly show you out the door.
