This never made sense to me. Doesn't this assume you are spending ALL your income though?
If I make 100K and get a 3% increase, that's $3000 more.
But if I only spend 30K to live, and my living expenses go up 5%, that's only a $1500 increase to my living expenses while I earned $3000 more that year. So how is that a pay cut if I actually have even more money left over that basically just goes into my investment account then.
> Doesn't this assume you are spending ALL your income though?
Why wouldn't you be? You will die, and the vast majority of religions (including atheism) don't let you take it with you. Sure there is some saving for a rainy day or retirement. However why are you earning more than that? If you need a job for social reasons only there are plenty of volunteer jobs that can provide that.
It's about the worth of what I am receiving from my employer and nothing to do with spending it.
If John makes $100k and lives on $10k, then cost of living increases by 100%. I believe John should be paid $200k, and according to you his salary should go to $110k.