Employees fighting a losing war against Inflation?

Inflation has been a hot topic recently. It has affected many businesses and more recently the end user – you and me.

To sustain business, business owners (Employers)

1 Fight to keep a competitive price. This can be achieved by “Lean”-ing their operations, eg: Reducing Operating Cost, change design and material, outsourcing, retrench, etc.

2 Differentiate their products. This can be achieved in different areas like quality, reliability, customization, after-sales services, innovation, etc.

3 Passing on the extra cost to their customers, whom later will pass on to their customers, so on… If the first 2 options failed, usually this final option will be used.

So how does an employee fight inflation?

1 Keep “Operating cost as low as possible

Is that possible? Live further away from work places. Eg: Punggol? Reduce cost of entertainment, Eg: Less movies, Less Fine Dining, etc. I find it very difficult for an employee to cut its “Operation Cost”, especially on necessities like Housing, Transportation & Food. Cutting cost at the expense of Standard of Living is also not very popular as Lifestyle is especially difficult to change when it comes to Lowering of Standard of Living. 

2 Passing on the extra cost to its customers

Is that possible? Very often businesses can increase the price of its products and services as this is completely under the owner’s control. What about an employee? Unfortunately, an employee does not have the right to increase the “price” of the service he/she offers. Employees can re-negotiate the for a new contract, but in reality, Employers tend to give pay raises only when he has the budget to do so, or the employee is providing services that can bring in extra revenue. Then again, employers only pay their employees enough to keep them working. Inflation is out of the equation. 

3 Differentiating our products 

I notice many of my peers (Engineers & Engineering Undergrads) are “re-inventing their services” to bring in more “Revenue” by switching to higher dollar valued services like jobs in the banks etc. Of course, here we do not take into account of the “Cost” which can include intangible items.

But what I want to conclude is, are employees fighting a losing “war” against inflation?

When fighting against Inflation, Employer can pass on their cost to customers. Employees cannot, as we are the end user. Fog eg: A Designer’s operating costs are all end-user items: Housing, Food, Entertainment, etc. But the services they provide needs to be sold to the Marketing & Sales Department, which in turn is sold to Contractor X which in turn packages it and sells it as a HP printer to the end user – You and Me.

So what strategy can employees use to triumph against Inflation? Do we simply give in? Or is there no other way, than to change profession for more revenue (regardless of cost)? or transform to become an employer?

Before ending this post, I wanted to vent some of my frustrations against Inflation. This is what this post is about anyway. And it seems to be higher than the 7% inflation mentioned in the newspapers.

Housing: 16% increease

Half a year ago, I was renting a room in Tampines for S$430 a month. Now, I cannot get a room for less than S$500 in Tampines region.

Transportation: 45% increase

About half a year ago, before the Taxi Hikes, Taxi from Tampines to Town cost me ~S$22 at 8pm. Last week about 8pm, I paid ~$32.

Dining: 28% increase

A decent meal for 2 in a Restaurant on a Saturday night 1 year ago would cost me $30 – $40. Recently, at the same restaurant, this would cost me $40 – $50.

Breakfast: 25% increase

I eat “Dou Hua” at least 2 times a week for breakfast. The uncle at the Tampines stall has been selling me 80cents, till 2 weeks ago. It really shocked me. I am paying $1, or 25% more, for my bowl of “Dou Hua” today.

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