Compare the pair:
Pilot A negotiates a 3% p/a increase inline with Qantas corporate policy.
Pilot B submits to an arbitration. Skips a pay rise in 2011 and is paid 4.5% in 2012 then 3% thereafter - effectively a 6 month pay freeze.
YR__ Pilot A Pay__Pilot B Pay__Difference___Compounding Difference
2010__$200,000___$200,000____$0__________$0
2011__$206,000___$200,000____$6,000______$6,000
2012__$212,180___$209,000____$3,180______$9,180
2013__$218,545___$215,270____$3,275______$12,455
2014__$225,102___$221,728____$3,374______$15,829
2015__$231,855___$228,380____$3,475______$19,304
2016__$238,810___$235,231____$3,579______$22,883
2017__$245,975___$242,288____$3,686______$26,570
2018__$253,354___$249,557____$3,797______$30,367
2019__$260,955___$257,044____$3,911______$34,278
2020__$268,783___$264,755____$4,028______$38,306
2021__$276,847___$272,698____$4,149______$42,455
2022__$285,152___$280,879____$4,274______$46,729
2023__$293,707___$289,305____$4,402______$51,131
From, little things, big things, grow.
Every year you are worse off, and that amount only compounds. That is the miracle or curse of compound interest – depending on which side of the equation you are on. Ten years from now, the average QF pilot is $51,131 worse off.