Even when we do the same thing, year after year, most of the time we will continue to have salary increments. Thats good even if very dangerous since productivity did not increase but we are paid higher. Somehow, when some countries could do what we do for lower pay, we will lose the job to them yeah. This is why relying on just salary alone will be very dangerous because the world is changing extremely fast and many jobs will disappear even as more new ones are created.
So, inflation for 2019 has been pretty low thus far. Yes, officially, we should end the year at below 1%! (read here for the report) As usual, many do not believe the government inflation number right? I thought we have a new government? Anyway, with a low inflation number, does that mean the salary increment should also be low? Since it does not have to help us to fight against inflation for 2019? Just think, even if they give us an increment of 3%, that’s still 2% above inflation!
Article in thesundaily.my The Korn Ferry 2020 Salary Forecast report estimates that salaries in Malaysia are expected to increase by 5% in 2020. Korn Ferry Asia Pacific leader for rewards and benefits practice Mary Chua said, “There has been a lot of discussion that the inflation rate is not reflective of the rising cost of living in Malaysia and the government is working on developing a new index that can provide better accuracy on the cost of living.
“The new index can be used alongside the inflation rate to shore up efforts in addressing the rising cost of living and the diminishing real wage increase.”
“Wage growth needs to be in tandem with productivity increases, if not these costs will eventually be passed on to consumers and perpetuate the rising cost of living.”
As per Korn Ferry report, Indonesia is forecast to have the highest real-wage growth at 5.1%, after accounting for an inflation rate of 3%. Meanwhile for Singapore, despite the salary growth forecasted at 4%, it is considered positive because of low inflation rate of just 0.4%. Please do read the full Article in thesundaily.my
Happy with the forecasted 5% for 2020? Well, let’s look at some simple calculation. If one has a RM5,000 salary? At 5% increment, that’s an increment of RM250 per month. it is RM3,000 extra per year. Actually not a lot but still worth saving and investing it yeah. Earlier article here: Are we saving, earning, investing and preserving? I wish that the 5% is a typical number but that the ones earning lower pay should get higher % of increment.
As for the CEOs (especially those who are already earning many millions every year), how about taking slightly lower increments for a year? 🙂 It will help the lower salaried staffs tremendously actually. As they say, when the lower salaried people gets the money, they will spend and this will help the economy. As for the rich, well, they may not even be spending it within Malaysia. Happy enjoying the increment and may the bonus be a lot yeah.
Next suggested article: Is inflation your friend of foe?