The Amply network is growing––rapidly. We’ve recently added Tech Republic, Daily Coin, Decrypt and Tech Funding News to our network of global publishers.
Each week, we create workplace and human capital content for our Amply partners across a whole host of jobs-related themes, and a topic that is gaining traction right now for workers is lifestyle creep.
We’ve had quite a year of it both in and out of work. Rising inflation, surging energy prices, mass layoffs across the tech and finance sectors, wider economic factors ricocheting from the war in Ukraine, a threat of recession, and supply chain issues have all had an impact.
When you add the cost of living into the mix, it’s clear that pay packets just aren’t stretching as far as they once did. The price of groceries is just one example.
Eggsplaining rising prices
In the US, egg prices have escalated dramatically. Latest data from the Bureau of Labor Statistics reports that they have grown by 70.1%, putting what has always been a basic food staple out of reach of many.
In the UK, consumer watchdog Which? discovered that prices for meat, yoghurt and vegetables also doubled in the year to March.
One of the quickest fixes for people struggling under higher grocery bills is to switch to a cheaper supermarket. Not so fast: Which? also found that it is the supposedly cheaper multiples such as Lidl and Aldi where price increases have been the most dramatic.
Lidl’s prices rose by 23.5% for the month of May, followed by Aldi at 22%.
Lifestyle inflation
The cost of living is undoubtedly affecting workers globally––wages simply don’t stretch as far as they once did. But there is another, hidden factor that affects people too.
If you’re upwardly mobile, moving jobs every two to three years in order to gain more skills, experience and of course, money, you may have fallen victim to a phenomenon called lifestyle creep.
Lifestyle creep, or lifestyle inflation, is a result of increased spending power. The more you have, the more you spend on your standard of living.
Where once you may have had a car that was a bit of a banger, now you’ve got the latest EV. You may have upgraded to a nicer street, done a home renovation, and started to shop for clothes at designer boutiques instead of the high street.
These are all upwardly mobile aspirations, of course; people want nice things. They want to eat at the latest high-end restaurant and take holidays worthy of Instagram.
The rise of the luxury market is fueling things further. According to experts, the global luxury market consumer base will expand to 500 million people by 2030, with this rise being strongly fuelled by younger Millennial and Gen Z consumers.
Lifestyle creep means your spending is always in line with your pay packet, and is a reason why even high-earners can feel “poor” on large wages. They’re still spending what they earn, but on more expensive things.
In the U.S, a report from PYMNTS and LendingClub found that over half of Americans earning more than $100,000 a year live paycheque-to-paycheque.
Where you live can exacerbate the problem. According to figures from Loughborough University, a decent standard of living in London costs up to 58 per cent more when compared to the rest of the UK.
There are obvious things workers can do, not least in acknowledgement of the issue in the first place. If you think this is happening to you, the first thing to do is to assess where you can trim the excess from your budget, start to put more money away for a rainy day and basically reign in your spending.
If you’re lucky to get an annual raise at your current company, it’s likely to be something along the lines of 2%-3%, which is not reflective of current inflation rates.
So the best way to quickly get a salary bump is to switch jobs. A study from Forbes discovered that workers who stay in a company longer than two years get paid 50 per cent less.
Job-hopping pays off, and the UK’s Office of National Statistics confirms it. Its data shows that workers who change jobs within a year of beginning a role have higher hourly wage growth.
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