Australians Need To Ask For Inflation Adjusted Pay Increases

Post by Sharat on November 21, 2018 · Under News · Comments Off on Australians Need To Ask For Inflation Adjusted Pay Increases 

If we pay attention to inflation data, then the average Australian should be asking for at least a $1,000 pay increase this year. The latest Consumer Price Index suggests a 2.1 per cent rise in the cost of living in Australia over the last year. Household budgets are tight as a result of electricity rate hikes and rising household debt and mortgage rates and despite companies engaging in cost cutting, every Australian should put in a request for pay increases.

CPI based pay hikes

It is not easy asking for a pay hike but irrespective of outstanding performance or meeting targets, it is important that employees push for pay hikes based on CPI. Wage growth in Australia has been non-existent for many years now whilst the cost of living continues to rise. If wage growth does not keep up with inflation, then employees end up bearing the impact of rising food, transport and housing costs lowering their standard of living. If an average full-time employee earning $63,000 a year before taxes wants to keep up with inflation, they would need to earn an extra $90 a month.

Rising cost of living

According to ABS, wages grew at just 2.1 per cent over the last year and this means that most Aussies are just managing to keep their heads above water when it comes to the rising cost of living. Whilst $90 a month doesn’t sound like it will make much difference to a monthly budget, workers need to keep in mind that this is the amount required to cover the increase in costs of every day items such as groceries, electricity or transport. If salaries do not rise by at least 2.1 per cent then an individual’s bottom line will be affected quickly.

Talk to your employer

Lots of companies have frozen wages in response to tepid growth or low profits. Even if that happens to be the case, employees still need to ensure they receive at least the CPI rate in terms of salary increase. Failing to receive that much means employees will have less cash available to play with every passing year. For those who do not feet certain about asking for a pay rise, then it is worth talking to your employer and asking for pay rises to be divided into two, one which is performance based and the other based on CPI.

Nothing within the website is, or shall be deemed to constitute, financial or other advice or a recommendation to purchase any product or service. Any and all information provided within the website is for general information purposes only. Neither do we claim to represent the whole market.