It’s so simple, someone making 200k gets 5% raise, that’s 10,000$ – someone else making 60k only gets 3,000$. After 10 years the 200k person is making 325k, whereas the 60k person is only at 97k. The higher salary increases at over 3x the amount in $$ of the lower salary.
Add in the percent based 401k (or RRSP if you’re Canadian) contributions that the company matches, and the higher salary people are laughing all the way to the bank.
No wonder there’s such bad income inequality and it continues to get worse. We really need to take a good look at how annual raises are allocated.
Right now at my company the whole operating unit gets a budget to increase everyone’s salary by x% and that’s what we get unless we constantly advocate for ourselves and fight for something more. Such bullshit – especially when I know someone’s getting almost triple my raise and not needing to do jack shit for it.