July 29, 2022, Paper: "To put it extremely bluntly (and he would never say this out loud): Federal Reserve Chair Jay Powell probably doesn’t want you to get a raise right now. That’s because of the potential for a wage-price spiral — prices go up, employees ask for higher wages to afford those higher prices, companies raise prices to afford those high wages and the cycle continues. But inflation is coming up in salary negotiations in a variety of industries. A survey from the staffing firm Robert Half found that more than 60% of employees plan on asking for a raise this year, with the top reason being the rising cost of living. If you haven’t had a raise since June of last year, you’re making about 9% less than you did then. That’s just inflation math. With the labor market still tight, why not storm into your boss’ office and demand to make at least as much as you did last year? “Inflation gives you a very solid metric,” said Mori Taheripour, who teaches negotiation at the University of Pennsylvania’s Wharton School. “This is not a subjective explanation. It’s purely objective, and it’s very rational.”"
HKS Faculty Author - Hannah Riley Bowles