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Rising prices, flat salary

April 15, 2008

So my regular bowl of sar hor fun has gone up from Rm4 to Rm4.50. That’s a 12.5% increase. Drinks are up by 20%. I hear it may increase some more.

As always, price hikes are outpacing salary increases. Its the same story year in and year out but this year seems worse than others.

Let me ask a question. If you were managing a company, would you increase everyone’s salary to compensate for these unplanned hikes? This is over and above the traditional year-end increment.

Lets say mid year sees an abnormal spike caused by more bad news from the US credit crisis and world oil prices. Local prices go up by another 10% making a total net increase of year to 20%. Would you introduce a mid year salary adjustment for everyone?

If not, why not?

(To make the situation realistic, you should know that the company’s shareholders may opt to wind down and leave you jobless if profits dip below certain levels).

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3 Comments leave one →
  1. April 16, 2008 2:39 am

    Yup. Normal items are starting to hike price again. Sien.

  2. April 16, 2008 10:25 am

    My favorite asam laksa went up from RM2 to RM2.50, 25% increase. I am collecting the stats and will show my manager, hoping he will give me a 2 digit % increment. *dreaming*

  3. Damien permalink*
    April 16, 2008 11:57 pm

    Willchua: Yeah the global food shortage is making it worse.

    Mybabybay: Assam laksa for Rm2.00? You’re obviously not living in KL. 🙂

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