Cost of Living vs. Wages

[akoch]

[Meatservo]

Chicken legs, back attached. Then, $5.67 a kilo. This weekend, 5.76 a kilo.

Gross. I don't like the backs attached. All those little vertebrae, it makes me feel like a scavenger picking a carcass. The only chicken I eat is the boneless kind.

[Relic]

I remember paying 94 cents a litre for 100LL 4 years ago. Now it's $2.00

[Colonel Sanders]

94 cents a litre for 100LL 4 years ago. Now it's $2.00

But remember, there's no inflation. Keep repeating
that until it's true.

[Beefitarian]

Chicken legs, back attached. Then, $5.67 a kilo. This weekend, 5.76 a kilo.

Gross. I don't like the backs attached. All those little vertebrae, it makes me feel like a scavenger picking a carcass. The only chicken I eat is the boneless kind.

Well now, La-tee-da.

[Joe Blow Schmo]

Was watching the News last night and saw a report on how the cost of food will be going up yet again in 2013. Also stated that many products: meats, Veg, Bread etc..., have all gone up 30-60% since 2002. I was surprised by these figures to be honest, and I do understand that there is inflation and that prices do rise, but in 10 years for things to double?? Wow!

30-60% in 10 years? that equates to 2.5-5% per year. That's a economically healthy inflation rate. Not too high, but not economic stagnation either.

[Colonel Sanders]

Last year my medical was $290. This year, same
medical, same doctor, $370. That's a 27.5%
increase in one year.

Is that "healthy inflation"?

[Bede]

Guys, this is getting dumb. Posters comparing what they're paying for a product and comparing it to their memory of a cost of a product many is hardly credible evidence. Someone has already done all the work for you. It's called a consumer price index and it's on Statistics Canada website.

[ant_321]

Last year my medical was $290. This year, same
medical, same doctor, $370. That's a 27.5%
increase in one year.

Is that "healthy inflation"?

Wow. Mine costs $90.

[Driving Rain]

http://www.bankofcanada.ca/rates/relate ... alculator/

Have fun.

I moved 3 years ago to my present location. In the process I found some old records while cleaning out files for the move. One of the things I found was a pay stub from 1982. In 1982 I was on the outfits smallest equipment making their lowest pay grade. For fun I put it through the above cost of living calculator. To my surprise I was doing better then (1982) then I was at the present (2009). In 2009 I was commanding our largest equipment at least 12 steps higher in pay grade then 1982. To my surprise due to inflation I was doing better THEN! I never realized how good I really had it in the old days. They even threw In free housing that wasn't part of the calculation. During the 90's and into the 2000's our wages were frozen for 10 years while the cost of living sky rocketed.
I guess it's all part of North Americas race to the bottom.

[Bede]

Not me. Just did the same thing as Driving Rain. I made about $50k (2012$) 8 years ago as an MU2 captain. The same job now pays $75k. Most 703 captains that I know make similar money now. I think most pilot's that fly floats, Navajo's, King Air's, etc makes more in real terms now than 10 years ago. The guys that are not making as much are the airline guys (especially 704 FO's). Despite being an airline guy, isn't that a good thing? Haven't we been complaining for years that the pay is too stratified in this industry with the top making multiples more than the bottom? In addition, jobs are much easier to come by today than they were in decades past. Does anyone remember the 80's? 4000hrs for a PA31 job.

I remain either optimistic or naive. I believe, on the whole, things are getting better in this industry (through my teal tinted glasses anyways;). Wages are better. Bosses are better. Safety is better. Maintenance is better. Schedules are better. Employment options are better.

[Colonel Sanders]

Can someone anecdotally reduce the price of 100LL?

Thanks,

Mine (medical) costs $90

Yes, but does it include two ECG's and a
category one TCA and a class one FAA?

[Joe Blow Schmo]

Last year my medical was $290. This year, same
medical, same doctor, $370. That's a 27.5%
increase in one year.

Is that "healthy inflation"?

Wow, one item increased significantly in price! I guess we better forget all the CPI data and just assume a 27.5% increase in everything then.

[akoch]

that's easy. Everyone makes the number for himself, using his own judgement and observation. Or does not. Nothing wrong withe CPI. For personal financial planning I have been using 5-7% inflation rate for the last 12 years.

[Colonel Sanders]

one item increased significantly in price!

I take it you've never purchased 100LL

[Shiny Side Up]

100LL has just been going up in price on a steady increase and has been in line with other fuels. Knowing what I know though, it does piss me off how the price at the pumps for autogas jumps around, they're just plain gouging us when they feel like they can. For us, we sell the 100LL at a price directly related to what we buy it for, and interestingly, we haven't changed it in about a year.

One thing I found out about selling 100LL is those who complain the most about the cost are always the guys who buy the least. When I buy it I realise its expensive stuff and the plane guzzles a lot of it. About $89/hour to be precise. The price of aviating.

[iflyforpie]

People have been saying for years how wages don't keep up with costs, but I don't buy it.

I think that perhaps wages haven't kept up with expectations (big house, two cars, RV/boat/motorcycle, Mexico every year, big screen, etc etc) perpetuated by extremely low borrowing rates combined with the large amount of credit available to people (since the banks have to lend more money to make money).

But for day to day stuff? I don't think so. People complain about $100 to fill up their vehicle, but have no problem paying the $5-10 a day it depreciates if they offload it in five years to buy a new one. People complain about the cost of groceries but spend $5 a day on a latté, $50 a week on booze, or thousands a year on cigarettes.

If the price of one thing goes up, fewer people buy it and the price goes down again. Or if it is something that we cannot go without, then we spend less money on other things and their prices go down.

You can see this in aviation with used aircraft prices. If you want to buy an aircraft, there is no better time than now. There is no such thing as a slow market for anything... if it isn't selling it is priced too high, plain and simple.

[akoch]

If more people shared this approach, we would have had one of the lowest national debt rankings per capita.

Also had lower standards of living than today.

On the other hand stats show that the absolute majority are not interested. And the government certainly is not, consistently. Hence the highest debt level.

[slowstream]

People have been saying for years how wages don't keep up with costs, but I don't buy it.

I think that perhaps wages haven't kept up with expectations (big house, two cars, RV/boat/motorcycle, Mexico every year, big screen, etc etc) perpetuated by extremely low borrowing rates combined with the large amount of credit available to people (since the banks have to lend more money to make money).

But for day to day stuff? I don't think so. People complain about $100 to fill up their vehicle, but have no problem paying the $5-10 a day it depreciates if they offload it in five years to buy a new one. People complain about the cost of groceries but spend $5 a day on a latté, $50 a week on booze, or thousands a year on cigarettes.

If the price of one thing goes up, fewer people buy it and the price goes down again. Or if it is something that we cannot go without, then we spend less money on other things and their prices go down.

You can see this in aviation with used aircraft prices. If you want to buy an aircraft, there is no better time than now. There is no such thing as a slow market for anything... if it isn't selling it is priced too high, plain and simple.

iflyforpir,

Although I see your point I don't think its the norm or the majority, there will always be people who do not live within their means or abuse credit, with respect to credit The Bank of Canada says that Canadians have certainly not used credit too wisely over the past decade but that they are getting the message and changing their ways.

There is a old expression which is much like the definition of the oldest profession; numbers lie and liars use numbers. This is certainly true with the Government and big corporations and I doubt you would find too many people who would disagree. I have also noted over the years that although my income has gone up it certainly has NOT kept up with the cost of living and I think if you poled most Canadians that you would find the very similar response!

I had a conversation a couple of months ago with a good friend from Auz, he was preparing for an interview with a Asian carrier. He has been flying for Qantas for nearly a decade and sad he was tired of wages stagnating and going down, while cost of living and taxes are getting out of control in Auz; he said he was determined to proceed with the new contract gig and move his family to Bali where he could afford to live and in fact would do better finically. I commented to him that I found it funny that I left Canada early this year because it was getting too difficult to stay afloat little-alone get ahead. I went on to say that I found it funny that both he and I left and are about to leave 1st world countries and move to basically 3rd world countries to have a better life and maybe be able to help our kids through college and maybe even have a little to retire on. Whats wrong with that picture? As I talk to many of friends in the industry and even outside the industry I hear similar thoughts.

So yeah although I see your point its a far bigger problem and I think people are really feeling it I know I was before I left Canada and personally I think its going to get a whole lot tougher over the next decade, I am sorry to say. But thats just my opinion

[Mig29]

Cost of living has gone up definitively over the years vs. wages! There's no doubt about that.

Food is going up, and droughts and severe weather (hurricanes) are adding to the cost. But we should be honest and realize that Americans on average throw away almost 40% of their food! Who's fault is that??

Governments are not doing any better in this department. Some may think it's a myth that many countries/corporations "dump" their food to keep the prices competitive. But it's true. And we talk about preventing famine in the world? Who are we kidding?

Gas, yes it keeps going up. But we keep buying larger vehicles with more "gadgets" (aka. weight), so all our advancements in fuel efficiency go out the window as we drive away from the dealerships.

On one hand we get bombarded by our government with new taxes, surcharges and on the other, by fancy advertisements telling us how cool the new iPhone or super thin LCD Tv is, while our is just old and dull. The one we bought just over a year ago!????

So, I don't know anymore...I'm confused. We have to learn to scale back I think and become more aware of our spending, wasting, but at the same time we have to hold our ground and demand our wages keep up the pace with inflation.

[Colonel Sanders]

we have to hold our ground and demand our wages keep up the pace with inflation

um.

I hate to rain on the parade, but last time I checked, the price
of a commodity (such as skilled or unskilled labour) was a
function of supply and demand, modulo various regulatory
distortions by the government, union, etc.

For example. Let's say there was no inflation for 10 years,
but there was a desperate shortage of welders, due to (e.g.)
demographic reasons - all the boomer welders retired. The
shortage of welders (commodity), if the demand for welders
remained constant, would results in an increase in the wage
for welders. The net result is that welders would earn lots
more money, even if there was no inflation.

Another example. Let's say there was heavy inflation for
5 years, but during that period there was a massive surplus
of say nurses. So despite the inflation, the wages of nurses
would logically be expected to drop - assuming a constant
demand for nurses.

Is this making any sense? I don't want to offend anyone
with a Che Gueverra t-shirt on, but this is sort of how things
work. I know people think I'm insane, but I really think that
an Economics 101 course should be required for an ATPL,
because after all, he's going to fly for a commercial air
service, isn't he?

[iflyforpie]

Not only that, but the welders making more money would be encouraged to buy more things.. thus wiping out supply in the face of price controls.

Of course even the most planned of economies cannot get around demand driving prices up; in Soviet Russia, people would sell used cars for much more than new cars because the only way to get the opportunity to buy a new car was to sign up... which hopefully your parents did when you were born.

Wages keeping up with inflation are a relative thing. Some get ahead, some fall behind, some won't and will never be that great, and some will always be so high as to make practically anything affordable.

[Mig29]

That makes total sense Colonel, even with out the two examples. (which are welcomed by the way )

I just said we should stand the ground and not let it slide under us, ie. continue in the backward, downward direction. We have seen few outfits sparking up in Canadian airline society that are heading in that direction and unfortunately dragging others with them. And yes, I admit, keep up with inflation cost, if all possible. Whether that means a slight Cost of Living percentage bump or actual hourly wage increase, anything is better then stagnating or going backwards.

You say supply and demand? Makes total sense, so one way to control erosion of the certain careers (doctors, pilots, dentist, mechanical engineers, etc.) is to control the flow of new students entering the field. Some are good at this, us pilots, not so much. We have no regulatory body that will impose this rule. Otherwise, when we flood the market your example above shows us what happens.

No I just can't be sure if we are really at the overflow stage in aviation (in Canada at least, because the shortage is more then apparent in Asia and M.East.

[akoch]

in Soviet Russia, people would sell used cars for much more than new cars because the only way to get the opportunity to buy a new car was to sign up... which hopefully your parents did when you were born.

In retrospect makes me wonder how did I manage to have a car back there. If you are serious then I simply did not have a chance.

But on a serious note - it is a philosophical question: would you like to live better, or would you prefer to be always challenged financially and not being able to get access to "toys" you want (note, not "need"). There are at least two opinions on this, and both valid. So it is a personal question, and I respect people who don't mind to scale back. The Russia example is not an easy one, since you had access to most toys you could dream of (including airplanes) basically for free.

Personally I like toys. I admit that "scale back and save" mentality is foreign to me. Not in the strictly materialistic sense of the world, but I prefer to have life today and not in the uncertain future. And play with things I consider fun today. Without it, I would have to go elsewhere and find other things that are fun. Why live life if you are not doing something that thrills you?

Edit: forgot a thing that is ingrained deep at the gene level - never go into debt, no borrowing etc. Earn first, then play with it.

[Beefitarian]