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It’s no secret that the cost of living has increased dramatically this year thanks to soaring inflation. In October, the Consumer Price Index, which measures the cost of common goods, showed an increase of 6.2% from the previous year. For context, the typical inflation rate is generally closer to 3% per year.

In fact, companies that grant cost of living increases (as opposed to merit increases, which are performance-based) typically increase workers’ wages by around 3% year over year. But given recent inflation, that won’t really reduce it until 2022.

The question is: will companies invest more money in the coming year? Or will workers effectively lose their purchasing power?

Will the 2022 salary increases disappoint?

When wages increase at a rate lower than the rate of inflation, it can put workers at a disadvantage. If someone’s cost of living goes up by $ 100 per month, but that same person only gets a monthly raise of $ 50, it might look like a pay cut, even if technically it isn’t. not the case.

Now we cannot say for sure what companies will do in light of recent inflation. But one thing we do know is that seniors on Social Security are getting their biggest annual increase in decades due to recent inflation. Specifically, social security benefits increase by 5.9% in 2022, and the main reason is that cost-of-living adjustments for these benefits are directly linked to changes in the consumer price index.

Employers do not have to follow this index. But those who want to do good for their workers may offer higher pay increases to account for the fact that inflation has been downright savage.

What to do if you don’t get a generous enough raise

If your business ends up sticking to the standard 3% increase, that could put you at a huge disadvantage, especially if you’re already living off a paycheck without saving any money. If your raise isn’t up to par, the first thing to do is ask your boss to meet with you and voice your concerns. If your company’s policy is to grant increases that reflect the rising cost of living, then it should be aware of the recent rate of inflation and use that to guide its decision.

If you are unable to persuade your employer to do better on the raise front, you may need to create your own pay raise by picking up a sideline. If you are willing to work some evenings or weekends, you can earn a higher salary and afford the opportunity to cover your bills stress-free (or at least with less).

Today’s odd-job economy is full of opportunities. Even if you only have a few hours a week to devote to a sideline, you can still fill your income well.

Hopefully companies will offer higher raises to employees in 2022. But if that doesn’t happen, having a back-up plan will help so you don’t fall behind on your bills.

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