The OECD on the 9th of Nov. 2009 said that food prices in Australia have increased by 41.3 per cent since the start of the year 2000. News Limited papers reported this just a few days ago.
In fact at this rate, the OECD says that we have the fastest growing prices for groceries in the WORLD.
We are only second to Spain whose prices have grown by 41.2 percent.
So you think, 41.3 per cent big deal, what’s that in real terms?
OK what does this mean in terms of per year? It is around 4% each year. Meaning, if you purchased a shopping trolley of goods in 2000 for $100, in 2001 it would be $104. In 2009, that shopping trolley of goods would be $141.30 due to the increased prices.
So let me ask you a question, “Have you been earning 4% more each year since 2000?” If you have great, you are ahead of the curb on groceries. If not, that’s bad because you are behind in food payments.
You need to keep this in mind each year when talking pay rises. I know someone who works for a company that asked them not to take a pay rise this year because of the GFC. He agreed to this request. However, he soon worked out that since he started with the company in 2000 he had only been getting increases of 3.5per cent a year.
For example, if he started in Jan 2000 at $35,000 and got a 3.5% pay rise each Jan. from then on until 2008 he would be on $46,088. This is a total pay rise of 31.6% over that time. Due to the fact that he gave up his pay rise in 2009 he is still only earning 31.6% more now than when he started.
This is despite food prices rising at 41.2%. His pay is not keeping up with the increases in his shopping bill.
Not only is he behind the food curb already because his employer doesn’t value him over a 3.5% range, but he is going to get further behind due to no pay rise at all this year.
Will his employer give him a pay rise in 2010; the jury is still out? Plus it raises further questions; if his employer does give a pay rise in 2010 will it only be 3.5% or will it be more to cover the amount lost in 2009?
In a country like Australia with food prices moving like they are, can you afford not to get a pay rise each year? You need to understand this to protect yourself from the fastest moving food prices in the WORLD.
You can easily see what you have been earning each year by your group certificates. Dig them out of the closet and see how much you were earning from 2000 to now. You might find you are well behind the increases in food costs. If you don’t have your certificates, call the tax department, they should have your records on file.
Thanks Adam Goulding (Also known as Mr Home Budget)
For more information please go to www.mrhomebudget.com.au
