[PeterisP]

By the way, "I'm not working any harder, nor am I taking on any additional work, but I'd like a pay rise anyway" is a completely valid argument if you're not being paid the market rate.

Has the market rate risen by 20% while you were here? A 20% raise for the same work is completely reasonable.

Were you being paid below market because at the time the startup was just scraping by and couldn't afford it? When that's over, you'll need pay your people much more for the exact same effort&results.

[taybin]

And if the market rate lowers 20%?

[maxbrown]

Naturally a 20% salary reduction!

Although occasionally this may be the case (pay cuts), it seems clear that the employer absorbs the risk of entering into contract with the employee at a certain time, with a certain market price. Interesting that the employee gets to partake in the upside but the employer gets the downside, with the exception of course of the employee getting fired.

I wonder - if there were really a way to gauge the current market for X talent (sort of a glassdoor salary index) - could employers purchase "insurance" or hedge their hiring price with "employee securities"?

[PeterisP]

In an inflationary environment, which is maintained pretty much all the time, it is much, much more common for market rate to raise rather than fall - i.e., frozen wages usually mean a loss for the employee.

That being said - have you seen what happens in shrinking industries? Yes, there have been companies that renegotiate a 20% decrease in wages, and fire/replace those who don't agree; it's exactly symmetrical as growing demand professions where people either get their raises or leave and need to be replaced.