Originally Posted by
MainlineFlyer
Firstly assuming this is just a temporary spike in the inflation RATE (which is a large assumption giving the facts), the current 9% of increase in prices is likely permanent. Thus we need AT LEAST a 9% pay raise just to account for the past year of cost increases.
Remember, the company is able to take advantage of inflation by raising prices in real time, with executive bonuses sure to follow. This is why economists refer to inflation as regressive. Business owners benefit, while wage earners have to claw back buying power.
We should be starting negotiations based on the hiring market which should net us a much higher percentage gain than 9%.
In a relatively flat economy, would you suggest that we start the basis of the next contractual raise at only 2%? I wouldn't think so.
Assuming the year over year inflation rate stabilizes and trends historically for the following 9 years (as an example, I'm certainly not an economist) then the new average inflation rate for the decade would be close to 2.7 vs the 2-ish percent historical. That certainly puts the ball in our court to add codify a 3 (hopefully even better than that) percent yearly COL into the next contract. Even better if we can codify it to run until CBA 3 goes into effect rather than at the end of CBA2. That way, if they drag negotiations out for 3.0 we still get some sort of increase.