Inflation has been a huge topic of conversation in the news this past year. We've seen record numbers for inflation, peaking at 9.1% year over year in June for the United States. Even if you haven't paid attention to the news, the hard fact that goods and services have increased in price is something that hasn't escaped notice.
Last year, I wrote about why photographers need to raise their photography rates. After the last twelve months, it's more important than ever to stress the importance of making sure your fees keep pace with the market rates more widely. More importantly, evaluating and raises in your rates should be done every single year.
US Inflation Rates
In the last 2 years, we've seen historic rates of inflation worldwide. Normally, inflation rates hover around 2% Over the last two years, we've seen inflation rates average around 7% in the United States.
Numbers over the last year in particular have seen extreme increases, topping out at 9.1% year over year in June of 2022.
Keeping the same rate year over year reduces your value
In the last two years, we've seen everything from gas to food to utilities cost more. Consumer goods have increased as well as services. Practically everything except the Costco hotdog and soda combo that you spend money on has gone up in price over the last two years. You're spending more money just to live. So should your clients when they pay for your work.
Simply put, if you aren't raising your rates to keep pace with inflation, your buying power is reduced. If everything from gas to the price of milk to the lenses you buy are increasing in price, without raising your own rates, your value as a creative isn't keeping pace with the cost of living.
Your clients are raising their rates
Just as consumer goods are increase, so are services. You can bet that the prices charged by your clients — whether they're musicians, agencies, art buyers, managers, etc — are increasing to keep their own profit margins up.
This year, publishers and streaming services have reached a settlement to increase streaming royalty rates to 15.35%. This is after already winning an increase from 10.5% to 15.1% for the 2018-2022 period. While this increase is not due solely to inflation, it's not independent from the fact that value has to track with the times.
It's not personal — it's just business. Your best clients should understand. And those who don't — they are not budgeting accordingly in a way that truly respects the value of photographers in relation to global economics.
Increasing your value year over year
Beyond cost of living adjustments, another important reason to increase your rates every year is for your own professional growth. As creatives, we are not static — we are constantly learning, adapting and bettering ourselves in small but important ways.
Wherever you are in your career, you are gaining experience in your craft. This comes in the form of faster workflows, better technique, and more. All of these small but important and incremental changes add value to your customers.
And that value to your customers can and should be expressed as increased rates.
Giving yourself a raise
With conventional 9-5 jobs, you should expect not only cost of living adjustments, but also pay increases that reflect your experience and abilities as tied to promotions, title changes and professional growth.
As photographers, we have only ourselves to advocate for ourselves in most instances. No one else will be fighting to give you a raise. You must be the one to demand it for yourself.
How much should you raise your rates?
A 2-3% raise year over year is generally accepted as appropriate for cost of living increases for many corporate employers. Again, this is in a typical 9-5 office world that many photographers don't occupy.
Personally, going into 2023, I would recommend a 8.7% increase to account for cost of living adjustments given the high rates of inflation seen in the last 24 months. Why 8.7%? The rate of 8.7% is the cost of living adjustment that the US Social Security Administration is raising benefits from 2022 going into 2023.
Almost every year since its inception, social security payments have been adjusted to ensure that the purchasing power of these benefits tracks with inflation. Note, this is simply keeping the same purchasing power — it does not account for your professional growth or advancement.
So at the minimum, I'd still recommend at least a 8.7% increase to your rates as you head into 2023.
Now that we've covered why you should raise your rates every year, jump into the 4 best times to raise your rates as a photographer. And as a refresher, for more reading, check out the common things to charge for as a photographer. You might be surprised at some costs and fees you can pass on to your clients if you aren't already.