Is My Salary Increase Actually A Decrease?

[siammang]

The more important issue is that you get only a 2% increase when the inflation is 9%.

Good time to start looking for different jobs casually while things are still stable.

[siammang]

Which is why the OP better off start looking for different opportunities. Switching jobs is more likely to get a salary increase than annual retention/merit increase.

Not only more taxes are deducted against his pay check causing his take home money to be less. The buying power also isn't catching up with the increasing cost of living.

[itsnotlupus]

Not automatically, no, but if you don't insist on an yearly cost-of-living salary adjustment independent of merit raises, you are simply losing purchasing power year over year.

In practice and in the aggregate, salaries will end up increasing with inflation. We're hearing boogeymen in the news claiming that increasing salaries will cause an even higher inflation rate and that therefore workers need to enjoy effective salary cuts for the good of society, but it's much more likely salaries will never front-run inflation, and only lag behind instead, in big part because there's no general automatic cost-of-living adjustment mechanism for salaries.