Our parents used to get double digit raises and a pension, that is now a thing of the past. I remember them, but now only the CEO’s and upper management get the big raises. The CEO’s make such a disproportinate amount of money compared to the average worker anymore. If they took 2-3% less raise it would give all the worker bees a decent raise for once.

The only way to save yourself really is entrepreneurship. If that’s not feasible, get a financial planner and start saving as much as you can ($50 a month is better than nothing) so that you can retire and get out of the race entirely someday.

This is the dividend society at work – most of those bonuses were in general paid not through normal compensation channels but through dividends. The top 10% effectively were paid directly through dividends, with the top 0.1% earning a whopping 25% of all income compensation through these dividends.

In good times, these top dividend earners were largely invisible – low interest rates meant that you could buy the house that you couldn’t otherwise afford, the expectation that both spouses in a marriage would work often contributed to the illusion that overall the family was doing reasonably well, and you could always re-mortgage your house (in essence, selling part of it back to the bank) in order to boost your bank balance.

Now, credit liquidity is drying up everywhere as the true scale of the incompetence, misappropriation and outright fraud begins to come to light, people are hunkering down and taking increasingly hostile and unattractive jobs for fear of being out of work, and people are becoming scared, depressed and angry.

I lived through the tech recession in the early 2000s as an out of work programmer and technical writer with several books to my credit. Eventually the industry recovered (somewhat) and the last few years have been quite positive for me and those in the tech field especially.

However, these are also people who are highly skilled, usually with advanced degrees and training, and who are used to jumping from job to job because the tech industry is inherently unstable. For the first time in a generation, there are going to be a large number of people who are either going to be facing the horrors of stagflation while trying to find jobs in markets that will likely not return for a decade or more (if ever), while there will be a second wave of baby boomers who are nearing retirement but who are only now beginning to realize that their nest-egg is made up largely of 4th and 5th tranch CDO paper worth absolutely nothing.

My prediction is that within a few years, if the growing inequity is not staunched and rebalanced, conspicuous consumption may very well make you a target by out-of-work mobs. Push the middle class far enough, and, as history has proven time and time again, they will rebel.

That’s also why the average is misleadingly high at 3.9%. While most people will get raises below that, management and people on Wall Street will get enough to raise the average. Nothing against those folks… I guess this is how the world works.

I think Bob from Yorkville, IL said it best…the problem with the economy can all be traced to GREED.

signed…a new member of the MISSING CLASS.

I’m at a fortune-50 company, advanced degrees, 18+ years experience, professional certification, yadda-yadda. Last year was the first raise in 6 years, a whopping 2%. Comapny is making record profits & earnings. All the justification for current pay / raise system is based on “benchmarking.” That word “benchmark” used to mean….. see what the best practuce is, what the best (in class) companies are doing. But now it means, what is the average. So the company wants the public image to be “we are the best” but internally the message is “we are trying to be average.” Oh, in case my boss reads this, yes I am still very happy to have this job.

Annie here — First of all, the raises companies plan to give (their budgets were written up before this article, obviously) aren’t “lower than normal”: 3.9% is the same as last year, and actually a bit higher than the 3.4% average raise that was the norm for several years before that. And second, are you really suggesting that from now on, I should report only good news? What kind of journalism is that? Anyway, folks, never forget that these figures are *averages*. If you believe you are worth more, put together a solid argument for a bigger raise and ASK for more!