In the US, I think part of the reason why this is the case is because the cost of living goes up significantly more than the cost of living adjustments.
For example, while landlords aren't supposed to raise the rent by more than 2% per year, I've had my landlord surprise me with a 5% change, but moving is too expensive to realistically consider [1].
Factor in all the additional costs of living, and if you don't get significant raises every year, you're going to fall further behind each year and be unable to afford a family, a house, or an emergency.
It's not great.
1 - When I moved to a good neighborhood in NYC, I had to pay a brokers fee of 15% + moving costs + up front costs to the landlord. Say my rent was 3k, this would be 5400 (0.15 * 3000 * 12) + ~500 + 9000 (first + last + security), or approximately 15k just to move into a place you don't own.
Totally in agreement with you, especially in the bigger metropolitan areas like NYC and SF.
Rule of thumb for me in my career is I expect at least a 5% raise yearly to account for cost of living and inflation of currency, otherwise, like you said, you'd be losing money YoY.
Thankfully, I've gotten many > 25% raises throughout my career. It's possible, but it's rare, and jumping jobs usually gives larger pay bumps.
What’s this about what the landlords are “suppose to do”? Most of the US isn’t rent controlled. My apartment that I moved into after getting married in 2012 went from $1300 to $1750 by 2016 when I left. It was $2000/month last year.
My mortgage is less than $2200 for a 3100 square foot house brand new build and that wont go up besides property taxes and insurance.
I can't compare to the US, but I'm in one of the more relaxed European countries and I definitely feel like I'm in the minority for pursuing some continuity with my current employer rather than jumping ship for a higher salary after two years.
(Fortunately, this is a good employer that realises what the reality looks like and is willing to offer me competitive raises to make it a doubly mutually beneficial arrangement.)
Well, in my case since both my salary and skillset stagnated from 2000-2008 - after 3% COL raises and bonuses being cut, I only made $4000 more in 2008 than I did in 2000, there is a lot of catching up with both I had to do. Especially seeing that in 2012, I went from being single to (gladly) getting married and taking on the responsibility of a preteen and a teen.
That being said, I was quite content with my pre-Covid salary which was pretty much average for a top end individual contributor locally. But I did need to make at least $20K more over in two years.
Then Covid happened, along with pay cuts and the local market dried up.
But now working remotely for BigTech means my base salary is a little more than it was pre-Covid and RSUs+Bonus is pure gravy that goes directly to long term savings.
It also meant my wife didn’t have to go back to work in the school system with a Covid going around.
I am not so sure. My wife is European and she is very much inline with always going upwards. I on the other hand very much enjoy work life balance as well as making sure I enjoy what I do even if I make less than I could elsewhere.
I'm not European, but I imagine that this isn't the case in Europe as it doesn't have the same culture around work.