SECTION 3
DETERMINING 2001 TO 2002 SALARY ADJUSTMENT


The market varies from year to year. After identifying your market salary for 2001 (Section 2), you should then examine the current market pressures on salaries.

INFLATION FACTOR

The inflation factor adds an amount (usually expressed in percent) to allow for the percentage increase in the Consumer Price Index (a restoration of the value of the dollar concept). National CPI increases as well as those for Alberta, Edmonton and Calgary are supplied below.

FIGURE 10

Consumer Price Incrase Index (1991 = 100)
Year-OverYear Percent Change
 
Canada
Alberta
Edmonton
Calgary
1991
5.6
5.9
5.6
6.0
1992
1.5
1.5
1.8
1.4
1993
1.8
1.2
0.8
1.3
1994
0.2
1.5
1.6
1.4
1995
2.5
2.4
1.9
2.7
1996
2.3
2.3
2.0
2.8
1997
1.8
1.8
1.6
2.0
1998
1.0
1.5
1.2
1.9
1998
1.8
2.1
2.1
2.0
1998
3.0
4.0
3.7
4.4
1998
2.8*
2.7*
2.7*
2.7*
Total Points
  


2. PRODUCTIVITY FACTOR (Increase in Gross Domestic Product)

In addition to the percentage increase in the CPI, an amount is added to allow for sharing in economic growth. (The Gross Domestic Product is now used as the main aggregate for measuring Canada's economic development.)

Note: In its September 2001 report, the TD Bank Financial Group reported an expected 4.0 percent real GDP growth in the Alberta economy for 2001, and a forecast 2.8 percent real GDP growth for 2002.

3. DEMAND FACTOR

It is anticipated in 2002, that there will be reasonably strong demand in Alberta for many of the engineering and goescience disciplines, despite considerable economic uncertainty in the world. While it is expected that demand factors for specific professions and industry sectors will vary considerably, an overall demand factor for the three professions is estimated at 1.0%. Members who are aware that their expertise is in short supply may want to uses a higher estimate for their demand factor; members who are aware that supply in their field of practice is abundant, may want to use a lower estimate.

EXAMPLE

Using the factors outlined under our example, the June 2001 survey data in Section 2 can be adjusted to June 2002 by adding what you estimate the increase will be for each of three factors for the 12-month period.

The salary adjustment estimates (as explained under each factor) are as follows:

     Inflation Factor (CPI) 2.7%
     Productivity Factor (GDP) 2.8%
     Demand Factor 1.0%
     Estimated Salary Adjustment
     from 2001 to 2002 6.5%

This example is illustrative only. Individual situations may vary considerably.

FIGURE 11 - APEGGA Employer Salary Surveys Percent Change in Mean Salaries By Level of Responsibility 1991 to 2001) (click here to view)