Why a Pay Raise May Not Boost Purchasing Power
Summary
Hollow Point Trading shares a short video explaining why a pay raise may not increase purchasing power. It compares income rising from $50,000 to $52,000, a 4% nominal increase, with a 5% rise in the consumer price index to show how inflation can reduce real income.
https://youtu.be/cvLkBvs4eHk
A pay raise can still leave purchasing power lower #Shorts
A pay raise measures dollars, not automatically purchasing power. In a hypothetical year, annual income rises from fifty thousand dollars to fifty two thousand. That is a four percent nominal increase. Suppose the relevant consumer price index rises five percent over the same period. Divide the new income by one point zero five to express it in ...
