[quote=SK in CV][quote=Rich Toscano]The cost of living goes up every year (even in calendar years 2008 and 2009 the cost of living went up). So if you didn’t get a raise in a given year, your compensation has actually declined.[/quote]

Not exactly. If your pay stays the same, then your pay stays the same. The purchasing power of that compensation goes down. That’s not necessarily the same as a cut in pay. [/quote]

I strongly disagree.

You are trading your labor for the ability to buy stuff. Or specifically, an hour of labor allows you to buy a certain amount of stuff. Dollars are just a medium of exchange in this transaction. If you do the same amount of work, but are compensated with the ability to buy less stuff, then your compensation has declined. The fact that you got the same amount of (now less valuable) dollars doesn’t change that fact.

For the record, I am not arguing that anyone should get automated pay increases. I’m just pointing out the fact that if your nominal pay did not increase in a given year, your real compensation actually dropped.