The 2022-23 Economic Crisis Megathread

[Syt]

[The Brain]

Why wouldn't I get a big raise? I'm wonderful.

[Jacob]

Why wouldn't I get a big raise? I'm wonderful.

Then obviously it's your fault if the economy falters 

[Josquius]

Who gets a big raise?
Is this something that actually happens?
If you need more money you switch jobs. This is a fundamental law of reality.

[garbon]

Who gets a big raise?
Is this something that actually happens?
If you need more money you switch jobs. This is a fundamental law of reality.

Since the pandemic both places I've been at have been worried about junior staff retention and gave them significant across the board increases. Doesn't seem to have stopped staff from leaving...

[celedhring]

Why is the thread title implying it is over

[Tamas]

Lol to be fair there has been enormous happiness in the stockmarkets lately.

Data suggests inflation is coming down without wrecking the economy (I mean last US data had inflation kind of pausing but hey).

Now of course the reason markets rally on this is the conviction that this will lead to interest rate cuts from March. I was listening to the Fed chair's press conference yesterday and nearly all of dozen or so questions were along the lines of "when are rate cuts?" which is a bit perplexing to me. If our financial system cannot anymore function without near-zero interest rates, they does not seem good.

[celedhring]

Regarding wages, I'm a freelancer so I don't really have "salary" but I've agreed higher rates with my main customer twice since the inflation crisis began. Overall, accouting for inflation, I'm getting paid more. But I'm really hard to replace for them. Most people I know their salaries have risen below inflation.

[Admiral Yi]

Lol to be fair there has been enormous happiness in the stockmarkets lately.

Data suggests inflation is coming down without wrecking the economy (I mean last US data had inflation kind of pausing but hey).

Now of course the reason markets rally on this is the conviction that this will lead to interest rate cuts from March. I was listening to the Fed chair's press conference yesterday and nearly all of dozen or so questions were along the lines of "when are rate cuts?" which is a bit perplexing to me. If our financial system cannot anymore function without near-zero interest rates, they does not seem good.

The financial system is functioning right now and rates are not near zero.

[Iormlund]

I lost a lot of purchasing power, as our salaries were not indexed to CPI and a freeze was decreed in EMEA.

Still making quite a bit more than other local alternatives, but I would not have come back from Germany for market rates ...

[Tamas]

Lol to be fair there has been enormous happiness in the stockmarkets lately.

Data suggests inflation is coming down without wrecking the economy (I mean last US data had inflation kind of pausing but hey).

Now of course the reason markets rally on this is the conviction that this will lead to interest rate cuts from March. I was listening to the Fed chair's press conference yesterday and nearly all of dozen or so questions were along the lines of "when are rate cuts?" which is a bit perplexing to me. If our financial system cannot anymore function without near-zero interest rates, they does not seem good.

The financial system is functioning right now and rates are not near zero.

Yeah but the only reason markets are going up is that they think cuts are just around the corner.

[Sheilbh]

Since the pandemic both places I've been at have been worried about junior staff retention and gave them significant across the board increases. Doesn't seem to have stopped staff from leaving...

Yeah - where I've been there's been one off payments/bonuses but also sliding scale rises depending on how much you earn. The most junior/lowest paid got almost 10% and the highest paid got just under 5%, I think. Nationally according to the ONS the average pay rise for the public sector last year was 6.5% while in the private sector it was 8% - my guess is both of those tilt at the more junior/lower paid end.

The BofE has been regularly surprised at the strength of wage growth. I think we're the only country in Europe where there has been a real risk of a wage-price spiral (on this we've been a bit more like the US).

[Tamas]

The BofE has been regularly surprised at the strength of wage growth. I think we're the only country in Europe where there has been a real risk of a wage-price spiral (on this we've been a bit more like the US).

Almost as if there is a recent but key difference in (job) market access between the UK and the rest of Europe. But it's hard to think of anything of consequence that has happened. 

[Sheilbh]

Almost as if there is a recent but key difference in (job) market access between the UK and the rest of Europe. But it's hard to think of anything of consequence that has happened. 

And is that good or bad in this case?

Not sure that works though. We've had record high net migration running at 3 times what it was in the early 2010s and over 50% of jobs advertised would be open to people outside the UK.

I think it's lack of unionisation (and industrial relations culture in the UK, which I'm experiencing for the first time in a heavily unionised sector) and that we have had a strong labour market. It's softening now but basically we've got full employment (unemployment was under 4%) with growing employment. So people can move - and I think since covid they have been (including me), which will drive wages.

[Admiral Yi]

Yeah but the only reason markets are going up is that they think cuts are just around the corner.

That's the financial system functioning.  When the yield on fixed income falls the yield on equities falls too and prices rise.