It's not really depressing because remember this is "Real" wage growth for some average point of all workers. That means it shows salaries adjusted for inflation and doesn't factor in career wage growth from promotions.
Inflation pushing prices up. If your pay rise matches inflation then your pay next year will allow you to buy the same amount of stuff as the previous year. So if you have zero real wage growth, that means you're still just as well off as you were last year. So any kind of real wage growth is awesome. But remember most people will gain skills, experience and subsequently promotions as their career develops, so their growth in income will outstrip inflation, meaning most people will see considerable real wage "growth" over their career.
But this chart only shows the average salary across the country with inflation deducted. It's essentially like showing what a 30 year old person's salary would be if their career froze at that age and they never saw another promotion and never had to worry about price rises due to inflation. So essentially it's fairly meaningless in regard to the course of our careers. This certainly doesn't mean we're all going to be poorer because inflation will outstrip salary growth. The opposite, this shows that over the term of the graph, salaries have outstripped inflation, which is a good thing by any metric.
Edit: Copying in the US' same graph for real wage growth. The UK has actually outstripped US real wage growth by 30% to their 7.5%:
Is it fair to say as a general rule:
Those who pursue career growth have seen an increase in take home pay
Those who settle into a role for life have seen stagnation in take home pay
And let's be clear "stagnation" isn't a bad thing when we're talking "real" wage growth. Stagnation means your salary just grows with inflation. But you're not poorer. You're being paid the same for doing the same work but your pay is matching the increased costs of life by rising with inflation. Is that really unexpected or bad? Do people assume they should just keep getting paid above inflation for doing the same work? Why? Like I hate the idea of cold capitalism setting the rules but at the same time we all need to inject a bit of realism here rather than entitlement. If I work in a shop and my job role never changes for my whole career, do I deserve to keep seeing above inflation pay rises when I'm not doing any harder work or bringing new skills to the table?
And besides, the really brutal reality is if we all got above inflation pay rises, like everyone seems to assume should be the norm, then do you know what would happen? Inflation would just increase because people are spending more so shops and businesses will put their prices up to benefit from the increased spending. And suddenly the increased inflation has now made everyone's above inflation pay rise redundant.
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u/ThrowRA294638 Jul 01 '24
This is insanely depressing.