How are wages usually managed in the US on scenarios like these? From the outside, it looks like there are no unions to push for wage inflation raises, is that correct?
I wish we had only 7% inflation here... (Argentina)
I wish we had only 7% inflation here... (Argentina)
In competitive industries like software engineering, you quit and get a new job and then they pay you 10-20% more. In monopsony industries like government, you suck it up and get a 3% cost-of-living increase while gradually falling behind on inflation. In unionized businesses (there aren't many left), your union fights for a 7% pay increase and you basically stay awash with inflation. In competitive small businesses, you try to quit to get that big raise but then find that no other small business has the money to pay you, so you spend your nights, weekends, and downtime on the job doing a data science bootcamp and then quit for a 10x salary boost.
It was the same in the 1970s. My mom (teacher) said that when she entered the workforce in the late 60s, teachers were paid about 20-30% less than professional occupations like doctors, lawyers, and engineers. By the early 1980s, the latter were making 2-3x more but teacher salaries had barely budged. By the time I entered the workforce in the mid-00s, software engineer starting salaries were about the same as teacher pre-retirement salaries, mid-career was 2-3x more, and the top end was 10x+ more.
We do have unions in the US, though I've not worked in a union shop before. Union contracts vary, but I get the idea it's not uncommon for them to include pay adjustments based on inflation.
Labor shortage -> real worker power -> solidify gains with unions
Trying to boost unions when labor is on the ropes is foolish preaching from vicarious onlookers.