Every working person dreams and waits for increase in salary. Lot of plans depend on the salary increments. But the question is how long and for how many years salary increments are possible? Is there any limit or impact of salary increments? How does salary increment affect our future salary or current job?

I do wait and want increments every year. But I would like to understand and review my companies balance statements and quarterly updates. I will take example of the industry which made me think about this. Recently pilots of one of the reputed airlines went on strike. Their demand was ‘salary hike’. Obviously different people will have different views. Some will support them because pilots job is risky so they should be paid more. But question is how much? How much increments someone can expect in their sector/industry.

Actually following events will happen with salary increments.

Pilots get Salary increment–>it increases the cost of Airlines (Net profit goes down)–> To keep up with the profits (though their are other ways to increase profit)–> Airlines will pass on at least part of the higher labor cost to their consumers –> This will lead to ticket price increase –> As ticket price increases Airlines will sell fewer seats at the higher price –> Which means they don’t need to fly often (flights will decrease)–> This will lead to less pilots required (they are the most paid so removing some will have direct benefits)–> JOB loss.

In some other industry,say, production industry- increase in wages will trigger the thought process to use machinery to automate things. Once machine is in place the labor requirements will reduce and profits will increase. Outsourcing of low skilled jobs is also consequence of high labor charges.

This is debatable topic but I want to emphasize that every employee should review his companies performance before expecting salary increments.