According to The New York Times, the average inflation is at 7.9%, setting a new high for the United States since the 1980s. Today, the average price of gas is a whopping $4.32, according to The AAA. With prices this high, it’s time to ask yourself if your job is paying you enough for your time and labor.
If you do not get a raise in 2022, you are taking a pay cut in order to pay for the current cost of living which can be detrimental to your financial freedom. So, how much should you be asking for and how do you go about asking for it? The Daily Stash is here to help advocate for yourself and get the cash you need.
Step One: How Much Should You be Asking For?
You should aim to keep your purchasing power consistent throughout times of inflation. What is purchasing power? Purchasing power is a calculation of how much your money can get you in the economy, according to the Consumer Price Index, or CPI.
To calculate and apply your purchasing power, you must find the current CPI and the CPI of the month you want to compare it to. In this instance, compare today’s CPI to ten years earlier, in 2012, when the CPI was 220.60. Let’s compare this to current CPI data, in January 2022 the CPI was 281.148. Divide the earlier year (2012) by the later year (2022) and multiply by 100 to find the CPI change during that period.
(220.60/281.48) x 100 = 78.37% This was the CPI change from 2012 to 2022.
Subtract the CPI change from 100 to find the CPI derivation. 100 – 78.37=. 21.63% This means that your dollar has 21.63% less spending power since 2021.
Do these equations for the current CPI data and compare it to the CPI data of the last time you got a raise. Negotiate your income adjustment to fit within your spending power.
Step Two: Asking for Raise
Negotiating an income adjustment with your employer can be intimidating, but it is a necessary step in advocating for yourself in the workplace. Use these tips to be confident in your delivery.
Prepare. It seems obvious, but it is the key step in this process. Calculating the CPI change and your spending power is a great start, but you need more than that. Gather all positive performance reviews, peer reviews, and make note of all of your accomplishments in the workplace. You’ll need these to help your case.
Practice out loud. Doing this work will help you sound confident and aid you in articulating your thoughts with ease.
Once you’ve gathered all of your information, prepared, and practiced- you’ll be ready to negotiate your raise.
Good luck, Daily Stasher! You’ve got this.