What is this inflation rubbish!!!

[LottaFun]

Guys I need help with this one just in case I miss anything. My son got an inflation relevant increase of 6%, but we all know there is inflation and there is living costs. Inflation might be at 6% but living costs is most probably at 15%.
I don't know what is in the basket they call inflation, but I do know there is one heng of a lot of non-relevant items like home appliances and so on, stuff you might purchase maybe once every 10 years.

Maybe somebody can tell us what is in the inflation basket?

But that is not what this item is about. This item is about living cost, your day-to-day costs.

I want to build a LCB - Living Cost Basket for the middle class and compare that from month to month.

So help me populate the LCB with items. There might be items I have forgotten about so please add to my list. Also state if you think an item should not fall in the LCB and why. I do not include absolute luxuries like for example DSTV or something similar. I call those nice-to-haves.

Here goes:
(I am not sure if I should exclude interest baring items because they are not really day-to-day necessities but they are items that the middle class have to pay monthly, so for now let's put it in)

Monthly bond installment

Municipality items:
Electricity
Water
Rates and Taxes
Sewage
Rubbish removal
Alarm system/security

Insurance:
Property insurance
House content insurance
Car insurance

Vehicle installment
Parking costs
Fuel costs
Transport costs

Monthly food/groceries

School fees if you have kids

What else guys? What am I forgetting?

 

[Arthur]

http://www.statssa.gov.za/net/cpi_calc/index.aspx

 

[LottaFun]

http://www.statssa.gov.za/net/cpi_calc/index.aspx

Aaa nice one. So there we have the CPI (consumer price index). "survey of approximately 80 000 prices gathered from a variety of outlets and service providers across the country."
Why then are companies working on inflation and not CPI when giving increases? Is it their intention to keep us poor?

I can't find it. What is the current official CPI rate?

 

[Jehosefat]

Why then are companies working on inflation and not CPI when giving increases? Is it their intention to keep us poor?

Inflation is how much CPI has increased over the past 12 months. (Although I think for the official inflation measure they use CPIX rather than CPI)

 

[Rkootknir]

Inflation is how much CPI has increased over the past 12 months. (Although I think for the official inflation measure they use CPIX rather than CPI)

CPIX (i.e. CPI excluding mortgage inflation) is no longer published. The inflation measure published these days is the change in the CPI (all urban areas) index.

For anyone interested, the current weights for different products can be found on page 6-7 of this PDF: http://beta2.statssa.gov.za/publications/P0141/P0141November2014.pdf

 

[noob_saibot]

Guys I need help with this one just in case I miss anything. My son got an inflation relevant increase of 6%, but we all know there is inflation and there is living costs. Inflation might be at 6% but living costs is most probably at 15%.
I don't know what is in the basket they call inflation, but I do know there is one heng of a lot of non-relevant items like home appliances and so on, stuff you might purchase maybe once every 10 years.

...

Are you sure this is all he got as a yearly salary increase?

What this basically means is that his *real* salary increase was effectively 0% (technically, it is negative, as inflation is over 6%).

Ideally, your son should be targeting a 10% increase yearly, unless he is starting from a low base (or doing some type of unskilled labour work).

 

[Stokstert]

Are you sure this is all he got as a yearly salary increase?

What this basically means is that his *real* salary increase was effectively 0% (technically, it is negative, as inflation is over 6%).

Ideally, your son should be targeting a 10% increase yearly, unless he is starting from a low base (or doing some type of unskilled labour work).

Or he is overpaid already and a burden to the employer.

 

[Messugga]

Are you sure this is all he got as a yearly salary increase?

What this basically means is that his *real* salary increase was effectively 0% (technically, it is negative, as inflation is over 6%).

Ideally, your son should be targeting a 10% increase yearly, unless he is starting from a low base (or doing some type of unskilled labour work).

I'd think that a low base should get home a bigger increase. Generally it's the higher paid guys who have hit a bit of a plateau and don't get those 30+% increases anymore.

 

[MrR]

I'd think that a low base should get home a bigger increase. Generally it's the higher paid guys who have hit a bit of a plateau and don't get those 30+% increases anymore.

Only time I've ever received 30+% increase is through official promotion (applying for my own job) or moving to different employer. On average my increases have been between 7 and 10%, which is absolutely pathetic.

 

[Messugga]

Only time I've ever received 30+% increase is through official promotion (applying for my own job) or moving to different employer. On average my increases have been between 7 and 10%, which is absolutely pathetic.

That says more about your employer than anything else. When I was a junior, I used to get pretty good increases. These days, it's closer to the 10% level.

 

[Mike Hoxbig]

At least he got an increase...

 

[Lupus]

6% is not bad

 

[genetic]

At least he got an increase...

This. We got none.

 

[TEXTILE GUY]

An easier way to look at it is as follows

The cost of living = what you earn +5%, - regardless of salary, age, job, country or any other factor.

 

[Polymathic]

That's what you get for having a Fiat based monetary system

 

[Sinbad]

Only way to expect an above inflation increase is to demonstrate that your value to the company has increased. If your productivity is par, why should they pay you more in real terms?

 

[Sinbad]

That's what you get for having a Fiat based monetary system

The electrics are going to crap out and the doors will fall off?

 

[Polymathic]

The electrics are going to crap out and the doors will fall off?

Fiat money is currency which derives its value from government regulation or law. The term derives from the Latin fiat ("let it be done", "it shall be").[1] It differs from commodity money and representative money. Commodity money is based on a good, often a precious metal such as gold or silver, which has uses other than as a medium of exchange, while representative money is a claim on the commodity rather than the actual good.[2][3][4]

The first use of fiat money was recorded in China around 1000 AD. Since then, it has been used continuously by various countries, concurrently with commodity currencies.

[video=youtube;U8Yn5jT8Hyc]https://www.youtube.com/watch?v=U8Yn5jT8Hyc[/video]