[bluGill]

Yeah, as a "stayer" I've learned every few years the company will give everyone a 10% pay raises just to catch back up. I hate switching jobs so I don't want to leave, but companies haven't figured that out.

It isn't hard - inflation is a known % every years, your average raise needs to exceeded that - once someone has experience they are only worth a cost of living raise, but juniors moving up to senior should be getting large raises every year to reflect their growth. Yet HR/management never looks at inflation before figuring out raises even though not matching inflation is how you fall behind and lost people with experience.

Of course companies have not yet learned to value experience. I'm not sure what will teach them that.

[bornfreddy]

The cynic in me is certain that inflation, among other things, is a tool for lowering peoples' wages. Not in numbers, but in value.

[usefulcat]

It also reduces the value of debt.

[HPsquared]

Interest rates are usually set above inflation.

[usefulcat]

Naturally, but for all pre-existing, fixed-rate loans, that is no help for lenders when inflation goes up.

[spencerchubb]

the fed typically aims for 2% inflation because if they aim for 0% inflation, the economy may experiencr deflation. if you get stuck in a deflationary spiral, it's very hard to get out

also since 2% is the typical target, they have a little room to lower rates and stimulate the economy, such as what happened in covid

[Aerbil313]

There are alternative theories as to why FED keeps inflation at %2, despite what they say. It's a rabbit hole.

https://wtfhappenedin1971.com/

[redblacktree]

Even if it isn't designed this way, it's a welcome benefit to many.