Comments on: Cost of living raise?

Question: Cost of living raise?

robbie01 — Mon, 12 Sep 2005 10:28:00 -0800

AnnualReviewFilter: It's that time of year again. Is there a rule of thumb or minimum, percentage-wise, to expect to keep up with inflation and cost-of-living for this year compared to last?

In other words, if you get an annual raise, should you hope to get a "minimum" percentage increase in order to break even given rising costs?

Any info I could find online was in regards to moving from one city to another -- I'm just staying in the same one. San Francisco, if it makes a difference.

By: Plutor

Plutor — Mon, 12 Sep 2005 10:57:44 -0800

The Consumer Price Index is probably what you're looking for. The change from July 2004 to July 2005 is 3.2% (taken from this table). But, given gas prices in recent weeks and the fact that that CPI is an average "for All Urban Consumers", you might want to hope for a bit more.

By: Plutor

Plutor — Mon, 12 Sep 2005 11:06:12 -0800

This table has some major urban areas. For the LA area for July 2004 to July 2005, the increase was 4.1%. On page 13 of last month's PDF, they have San Francisco, which says from June 2004 to June 2005, the CPI increased a paltry 1.1%.

By: curtm

curtm — Mon, 12 Sep 2005 12:16:50 -0800

Screw the consumer price index. It exempts real property, food and gasoline.

I live in Orange County, in southern California. Property values went up 20% last year and gasoline doubled.

So I'd say, 10% if you're in a big city (or in California), 5% if you're not. If you're in the chilly regions, fuel oil is more expensive, too, so tack on another 2%.

By: Plutor

Plutor — Mon, 12 Sep 2005 15:26:36 -0800

Actually, the CPI includes housing (rent or owner's equivalent), transportation (gasoline and insurance) and food. The weights they give to different expenses might not be the same as everyone's (they include college tuition and pet expenses, which aren't quite universal), but it's a better starting point than winging it.

And gas prices did not double in the last year. In SanFran, they've gone from about $2.20 to $3.00. (You'll have to click on "1 year")

By: pomegranate

pomegranate — Mon, 12 Sep 2005 19:02:30 -0800

3.2% is the average annual Cost-of-Living or "good" performance raise being given at Fortune 500 companies this year. I know that's not what you want to hear but that's what the Society for Human Resource Management annual survey says. That's actually high, usually it's closer to 2.9%.

By: curtm

curtm — Tue, 13 Sep 2005 07:03:26 -0800

Actually, the CPI includes housing (rent or owner's equivalent), transportation (gasoline and insurance) and food.

My bad. I was actually thinking about the "core inflation rate" cited by economists and the administration. There's a good discussion of that here.

By: hincandenza

hincandenza — Tue, 13 Sep 2005 14:53:47 -0800

Just an anecdote: When I worked at Microsoft, it was lower- if you were a "great" performer you might get 1.5-2%, or if you were really lucky a whopping 3%, as I recall. I suspect most tech companies- that is to say, non-unionized work forces- give the same to their employees: a big fat "Ha! No soup for you!" And like most tech companies, Microsoft invented fake "rules" discouraging compensation discussions among employees. Silly tech geeks... =)

Granted, Microsoft also had a bonus with the annual reviews, although it seems to get pared down every year. While a small percentage of people, myself included, would see bonuses up to the maximum 15%, most people seemed to get around 5%, maybe, on average.

I guess that was more a "Cost of Living Adjustment" than a bonus at that point.

By: croutonsupafreak

croutonsupafreak — Wed, 05 Oct 2005 15:38:49 -0800

At my office, the range is 0 % to 4 %, depending on performance evaluation. There's huge disparity in pay between different people doing the same jobs, and my boss said some people's raises may be a bit smaller / bigger to bring them more in line with where they should be.