If you can’t get a raise due to inflation, ask for it instead

With inflation raging, driving up the costs of everything, you might be thinking of asking for a raise. It’s a reasonable request. With inflation going over 9%, your paycheck doesn’t go that far anymore. The average American household will have to spend $5,200 more, or $433 per month, just to consume the same goods and services as last year. Here’s the dilemma: It’s a reasonable request, but the economy, the labor market, and business sentiment have changed.

Why inflation will hurt the labor market

The labor market is expected to ease as the Federal Reserve Bank and the Biden administration pull back from quantitative easing and trillion-dollar stimulus packages. Fed Chairman Jerome Powell’s goal is to crush the economy, with the goal of “whipping inflation” (a term used in the 1970s). In the process of fighting inflation, businesses will see less business and consequently reduce their workforce.

Moreover, this period is not going to explode any time soon. The last major inflation peak occurred 40 years ago. This lasted approximately from 1965 to approximately 1982. Paul Volcker, the chairman of the Fed at the time, took dramatic steps to end the ruinous cycle of rising prices and wages by raising interest rates to 20%.

Your boss knows you won’t leave as the job market weakens

Your boss and your management are in a difficult situation. They understand that your expenses are increasing at a frightening rate. Supervisors see you as a valued employee doing a great job and they don’t want to lose you. However, their fear of you coming out in the Great Resignation has been alleviated. The labor market is still relatively strong, but all of that may change as layoffs and hiring freezes are announced daily.

Management’s thought process is that if they give you a raise, they’ll have to do it for everyone else. They’ll say it’s too expensive, especially since their business costs are also rising. The part that isn’t said out loud is that they think the job market is going to get worse and there’s a good chance you won’t jump ship because you’ll be the last one hired and the first fired when things go wrong.

What you can ask for instead of money

If you can’t get a raise, think of things to ask for that would improve your work life. These include a four-day workweek, shortened workdays, remote and digital nomad options, staggered hours, more vacation and personal time off, moving to a lower cost venue for the same amount of money, stocks and stock options, a bigger bonus (if the economy picks up), a higher title, and promotion or custodial assistance of children.

Decide which factors are most critical to you, then push for them. If you don’t receive any of these benefits or others, it shows that your company takes you for granted. It’s almost like they’re daring you to leave.

Some companies prefer to make life uncomfortable for the workers, so they leave of their own accord. With attrition, companies won’t attract headlines, touting the number of people laid off. They may also not have to pay severance pay.

If so, start a secret job search. Be careful, because in difficult times the news may get back to your boss and there may be a chance that you will be fired. They would justify the termination by saying the business needed to scale up, and since you’ve shown you want to leave, they’ll be happy to show you the door.

William M. Mayer