Google won’t raise employee pay to match inflation

Google told employees at a virtual all-hands meeting Tuesday that it will not be adjusting workers’ pay to match inflation. In other words, Google’s rank and file will be effectively earning less, even while the company has thrived, achieving record profits for five consecutive quarters.

According to audio shared with , CEO Sundar Pichai read a question from his staff concerning the rising cost of just about everything, and the decision by some companies to offset those hardships with commensurate pay raises. The company’s vice president of compensation, Frank Wagner, reportedly responded that: “As I mentioned previously in other meetings, when we see price inflation increasing, we also see increases in the cost of labor or market pay rate,” and that “those have been higher than in recent past and our compensation budgets have reflected that.”

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Raises of this kind are fairly standard for many businesses, and are typically referred to as “cost of living adjustments.” Wagner, however, claimed any potential pay raises ought to reflect “performance” instead of a smaller but more broadly implemented increase.

Google has shown a willingness to adjust compensation related to the realities of the pandemic: by cutting pay for workers who chose to remain remote in locations with lower costs of living. In some cases these salary reductions were estimated to be as much as 25%, according to .

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