I'm saying that if you give everyone a raise matching inflation (all things being equal), the people's wages who rose naturally (and contributed to CPI by virtue of raising labor cost of goods) are no better off than they were before.
My software engineering salary buying less of car/house/food than it did last year is a reflection (in an abstract sense) that my total share of "value" is relatively smaller by comparison to the factory worker, farmer, etc.
In other words: the economy is putting more of a premium on people who make things that everyone buys than it did the year prior. My take is that this is totally ok. The value of goods, services, and labor relative to one another change over time. Raising my salary in precise lockstep with the increase in cost of goods will only lead (indirectly) to more inflation.
Put another way: The company isn't compensating you in Abstract Adjusted-for-Buying-Power Compensation Units. They aren't guaranteeing your work entitles you to the same lifestyle every year, year after year.
They're compensating you in dollars. If your best argument for an 11% raise is that "stuff is more expensive", it's a lot less convincing than "I'm 11% more productive".
It sucks that things are more expensive, but if the alternative is freezing everyone's relative buying power where it's at right now, I'd prefer not to do so. Because I think that people growing my food and making things in factories deserve to get ahead, but in order for that to happen, (all things being equal, even if you drove profits and executive pay down to some "acceptable" level) costs of things might have to increase.
All that is a super abstract and hand-wavy argument ignoring really important factors over the past several decades. Now of course, the reality of the situation is that a lot of productivity increase went straight to the top instead of improving compensation. But wage-inflation for all doesn't solve that.
But in my abstract hypothetical scenario:
- where the only relevant factors to CPI are labor cost
- and we've effectively max'd out productivity per worker
- so wage increases aren't offset by output
then I'll take increase costs relative to my personal lifestyle if it means less people with essential jobs living paycheck to paycheck.
I don't want everyone on the same salary, but in a scenario where vampire squids aren't sucking all excess wealth out of the system, I'm ok with my tech salary being relatively closer to farmers and factory workers. (or really arriving at whatever unmolested market price makes sense)
"My software engineering salary buying less of car/house/food than it did last year is a reflection (in an abstract sense) that my total share of "value" is relatively smaller by comparison to the factory worker, farmer, etc"
That's true if that factory worker or farmer is also getting a raise. It can still be true if those workers are getting raises higher than inflation even if you as a dev gets an inflation adjustment. The thing I was saying is that I should get inflation adjusted and those other people should be getting more than inflation adjusted by moving up the floor.
"it's a lot less convincing than "I'm 11% more productive"."
It can still be convincing if the company is able to charge 11% more for the same output you are producing.
"Now of course, the reality of the situation is that a lot of productivity increase went straight to the top instead of improving compensation. But wage-inflation for all doesn't solve that."
Not entirely, but maybe a little. The fact that the top are absorbing the increases while the workers absorb inflation is the problem. If wages are inflating as they are now, the at least puts pressure on the top to stop sucking up the extra to stay competitive. Maybe. I can't imagine how good life could have been if real wages hadn't decreased for the past 50 years.
"I'll take increase costs relative to my personal lifestyle if it means less people with essential jobs living paycheck to paycheck."
I'd rather make the top pay. I don't make all that much.
My software engineering salary buying less of car/house/food than it did last year is a reflection (in an abstract sense) that my total share of "value" is relatively smaller by comparison to the factory worker, farmer, etc.
In other words: the economy is putting more of a premium on people who make things that everyone buys than it did the year prior. My take is that this is totally ok. The value of goods, services, and labor relative to one another change over time. Raising my salary in precise lockstep with the increase in cost of goods will only lead (indirectly) to more inflation.
Put another way: The company isn't compensating you in Abstract Adjusted-for-Buying-Power Compensation Units. They aren't guaranteeing your work entitles you to the same lifestyle every year, year after year.
They're compensating you in dollars. If your best argument for an 11% raise is that "stuff is more expensive", it's a lot less convincing than "I'm 11% more productive".
It sucks that things are more expensive, but if the alternative is freezing everyone's relative buying power where it's at right now, I'd prefer not to do so. Because I think that people growing my food and making things in factories deserve to get ahead, but in order for that to happen, (all things being equal, even if you drove profits and executive pay down to some "acceptable" level) costs of things might have to increase.
All that is a super abstract and hand-wavy argument ignoring really important factors over the past several decades. Now of course, the reality of the situation is that a lot of productivity increase went straight to the top instead of improving compensation. But wage-inflation for all doesn't solve that.
But in my abstract hypothetical scenario: - where the only relevant factors to CPI are labor cost - and we've effectively max'd out productivity per worker - so wage increases aren't offset by output
then I'll take increase costs relative to my personal lifestyle if it means less people with essential jobs living paycheck to paycheck. I don't want everyone on the same salary, but in a scenario where vampire squids aren't sucking all excess wealth out of the system, I'm ok with my tech salary being relatively closer to farmers and factory workers. (or really arriving at whatever unmolested market price makes sense)