Basically we are in a deep discussion about basic economics. We all work for the same company. Lets say our company gives a 3% raise annually but the rate of inflation is 4.5%. Are the employees falling behind more and more every year or is this an illusion? Hopefully some economics major will jump in here!
2007-05-11 06:46:57 · 4 answers · asked by 123 2 in Social Science ➔ Economics
yes, you will get less in real terms.
I.e. you won't be able to buy as much stuff with you salary as last year.
Also, inflation is national average, the situation in your town might be different. Prices go up faster if the place is growing fast, and might not grow at all if people are moving out.
2007-05-11 06:55:01 · answer #1 · answered by Anonymous · 2⤊ 0⤋
The short answer is yes. If year over year inflation is more than your salary increases you fall behind.
But this only matters if you stay in that job as it would take several years before you felt the pinch. Also the overall rate of inflation my not apply to you. For example, if you own your home, inflation does not change your mortgage payment.
2007-05-11 14:44:51 · answer #2 · answered by jehen 7 · 0⤊ 0⤋
yes!! your purchasing power will decrease..
2007-05-15 00:50:01 · answer #3 · answered by opinion 2 · 0⤊ 0⤋
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2007-05-15 00:23:27 · answer #4 · answered by Anonymous · 0⤊ 0⤋