Back to Blog
Hands stacking rising salary inflation blocks.

Is Your Salary Raise Proportional to Inflation?

You've had your dream IT job for years, and you're about to enter your annual review and salary raise meeting. Before you accept whatever raise the company offers, consider if it will be proportional to inflation.

If it isn't, you can decide to negotiate or look for a new job. Then, you can get the money you need to pay your bills and help your salary go further each year.

Keep reading to learn more.

Table of Contents
What Is Inflation?
Inflation and Wage Raises
How Inflation Negates a Salary Raise
What to Do If Your Salary Raise Isn't Enough
Get the Salary Raise You Deserve

What Is Inflation?

Inflation refers to the increasing cost of goods and services over time. Depending on the economy, inflation may be relatively slow, so prices don't go up that much.

However, as of early 2022, core inflation is up 6%, and annual inflation is up by 7.5%. Production costs are one of the biggest factors that drive inflation, and that can affect anything you need to purchase.

Core inflation rates graph for 2022.

In the past couple of years, inflation has grown significantly. This year has one of the highest inflation rates of the past four decades, which can make it harder for workers to afford necessary goods.

Inflation and Wage Raises

Some people argue that wage raises lead to inflation, and that's partly true. Wages are part of production costs, so if companies pay their workers more, that can affect the company's profits.

When a business works with another company, for something like manufacturing, the manufacturing costs may rise. The manufacturer might offer their workers a raise, which causes the company buying the items to pay more.

Then, that company needs to make a profit, even if it offers every worker a raise. All of this can lead to a vicious cycle of inflation and raises, which doesn't help anyone.

How Inflation Negates a Salary Raise

If you get a salary raise, you should consider the rate of your raise and that of inflation. Using the early 2022 rate of 7.5%, any raise that is less than that may not be enough of a raise for you.

Sure, you might earn more money, but if that extra money doesn't cover the higher cost of food and housing, it won't matter. With an overall average raise rate of 3%, you could lose money thanks to a high inflation rate.

For salaries to truly increase, the raise needs to be higher than the current rate of inflation. In most years, this isn't a problem since inflation is lower than the average raise.

What to Do If Your Salary Raise Isn't Enough

After meeting with your boss at work, they may offer you an annual raise. Maybe your raise has been enough in the past, so you've been able to continuously pay your bills.

With high inflation, you might still get an offer for a raise. However, that raise probably won't be enough of a salary increase in line with inflation.

Fortunately, you can do a few things when your salary raise isn't as much as you need it to be.

What to do if you salary raise isn't high enough.

Contain Your Emotions

First, you want to make sure you don't complain or work yourself up about the raise, especially in front of your boss. Take a look at the raise and how much it is.

If it's not enough, you can ask about increasing the raise. Your boss may be able to talk now, or you might have to schedule another meeting to talk about increasing your paycheck.

Either way, try not to come off as unprofessional in front of people at work. Then, you'll have a better chance of making your case for a bigger raise.


After you calm yourself, ask your boss if there's any room for negotiation. It takes skill and a bit of practice to negotiate a salary raise well, so your first negotiation may not be perfect.

However, it never hurts to learn how to negotiate your salary raise. The worst that can happen is that your boss doesn't offer you more pay, but you might luck out and get more money.

Negotiating may be easier if you can prove your value to the company. If you've helped your boss or the business make more money, you can include that in your meeting to help convince them you're worth the extra pay.

Outline Talking Points

Speaking of explaining why you deserve a bigger salary raise, you should outline some talking points. If you're discussing a bigger raise right when you get your first one, you can think this through in your head.

Otherwise, you may want to write out some talking points on paper. That way, when you go back to meet with your boss, you will be able to explain everything that you've done to deserve better pay.

For example, maybe you've helped retain a client that was about to cancel their contract. Maybe you're willing to help other employees who are struggling with work, so your boss can focus on their tasks.

Whatever it is, think about what sets you apart. Then, you'll be able to make a more convincing argument when you talk about increasing your raise.

Look for Another Job

If your boss still refuses a larger raise, your best option to earn more money is to find another job. You can work with an IT staffing agency to help find jobs in the industry.

In many cases, your initial salary sets a precedent for your future annual raises. If your first salary at your current job was a bit low, you may not be able to get a big raise now or in the future.

Be sure to look at other companies with IT jobs, and consider what you need to make to pay your bills. Then, you can make sure you'll get enough of a raise to make the new job worth your time and effort.

Get the Salary Raise You Deserve

Are you tired of getting a small annual salary raise each year that doesn't even keep up with inflation? To keep this from happening, be sure to know the current inflation rate.

That way, you can negotiate for a raise that exceeds inflation, so you'll have more money to save or spend. If that doesn't happen, you may want to look for a new job.

Is your boss unwilling to offer you the raise you deserve? Contact us to learn how we can help.

Hands stacking rising salary inflation blocks.
Get connected to your next job
Back to Top
Share this post: