The ATA Chronicle - September/October 2022 - 34

ENTREPRENEURIAL LINGUIST By Judy Jenner
What Does Shrinkflation Have
to Do with T&I?
Have you heard of an economics term called shrinkflation? I hadn't
until earlier this year. Unfortunately, I encountered it in Spanish during
an interpreting assignment. (Luckily, it was a practice assignment!) I did
recognize the term and was able to render it correctly in English, but didn't
know exactly what it was all about, so I looked it up.
T
urns out you don't need
to be an economist to
understand the concept.
Shrinkflation is what happens
when manufacturers sell
you seemingly the same
quantity of product, but it's
actually less-and they sell it
at the same price or higher.
This means, of course, that
customers are both receiving
less and paying more, which
is hardly a way for sellers of
products to make themselves
popular. Therefore, sellers
of myriad products-
from cookies to laundry
detergent-have found clever
ways to trick customers into
believing they're receiving the
same quantity of product as
before: think clever packaging
and some misleading labeling.
Some clueless customers,
like yours truly, hadn't even
noticed they were getting
fewer cookies than before,
which is exactly what the
seller intended.
Useful Links
Abdelnour, Alex, et al.
" Five Ways to ADAPT
Pricing to Inflation "
(McKinsey Insights,
February 25, 2022).
U.S. Bureau of Labor
Statistics Consumer Price
Index Inflation Calculator.
" What is Compound
Interest? " (U.S.
Securities and Exchange
Commission).
While this goes without
saying, I do want to state for
the record that I'm in no way,
shape, or form advocating
for applying the principles of
shrinkflation to our services
businesses, which would
be difficult to do anyway.
(It's not like it would be
easy to offer 50 minutes of
interpreting instead of the
usual hour and bill the same
fee schedule.) What I'm
advocating for is that we need
to adjust for inflation. Let's
have a closer look.
Readers of this column,
which, believe it or not,
dates back to 2009, might
recognize an argument that
I've been making for years:
that as self-employed small
business owners, we must
adjust our fee schedule for
inflation, if only to preserve
our purchasing power. If
you work in-house for a
company, this adjustment-
which is far from a raise-is
usually called a cost-of-living
adjustment. In fact, when I
was an in-house translation
team manager many moons
ago, my boss and I had
34 The ATA Chronicle | September/October 2022
good-natured banter every
January about the raise versus
cost-of-living adjustment
question, and every year
I would get both. It turns
out that we're not as good
about giving ourselves what
companies-at least good
companies-naturally give
their employees. Many
colleagues don't adjust
for inflation at all. If you
don't adjust in 10 years and
inflation is, say, 3% every
year, you have essentially
decreased your purchasing
power by more than 30%,
but probably significantly
more due to something called
compound interest (the
interest you earn on interest).
Adjusting for inflation is
now, for the first time in
decades, something that's
gone from nice-to-have to
critical. With inflation rates at
unprecedented levels in the
U.S., which, frankly, we're
just not used to, small
businesses must adjust their
fee schedules to make it
through this difficult time.
Everything has gotten more
expensive, and so will
services, including ours. I've
taken the first steps and
informed some of my largest
customers of an increase in
my hourly fee schedule (and
daily fee schedule for
conference interpreting) and
have yet to hear any
complaints. I highly
encourage you to do the same.
To sum up: shrinkflation is
about deceiving customers,
but adjusting for inflation is
about making sure you can
stay in business to take care
of your customers in both the
short and the long run.
Judy Jenner is a Spanish and German business
and legal translator and a federally certified
Spanish court interpreter. She has an MBA in
marketing and a master's in conference interpreting.
She runs her boutique translation and interpreting
business, Twin Translations, with her twin sister Dagmar. She
was born in Austria and grew up in Mexico City. She is a former
in-house translation department manager. She writes the blog
Translation Times and the " Entrepreneurial Linguist " column
for The ATA Chronicle, serves as one of ATA's spokespersons,
and is a frequent conference speaker. She is the co-author of
The Entrepreneurial Linguist: The Business-School Approach to
Freelance Translation. judy.jenner@twintranslations.com
This column is not intended to constitute legal, financial, or
other business advice. Each individual or company should
make its own independent business decisions and consult its
own legal, financial, or other advisors as appropriate. The
views expressed here are not necessarily those of ATA or its
Board of Directors. Ideas and questions should be directed to
judy.jenner@twintranslations.com.
www.atanet.org

http://translationtimes.blogspot.com/ https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/five-ways-to-adapt-pricing-to-inflation https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/five-ways-to-adapt-pricing-to-inflation https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/five-ways-to-adapt-pricing-to-inflation http://www.entrepreneuriallinguist.com/book/ https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/five-ways-to-adapt-pricing-to-inflation http://www.entrepreneuriallinguist.com/book/ https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/five-ways-to-adapt-pricing-to-inflation https://www.bls.gov/data/inflation_calculator.htm https://www.bls.gov/data/inflation_calculator.htm https://www.bls.gov/data/inflation_calculator.htm https://www.investor.gov/additional-resources/information/youth/teachers-classroom-resources/what-compound-interest#:~:text=Compound%20interest%20is%20the%20interest,%2C%20you'll%20have%20%24110.25 https://www.investor.gov/additional-resources/information/youth/teachers-classroom-resources/what-compound-interest#:~:text=Compound%20interest%20is%20the%20interest,%2C%20you'll%20have%20%24110.25 https://www.investor.gov/additional-resources/information/youth/teachers-classroom-resources/what-compound-interest#:~:text=Compound%20interest%20is%20the%20interest,%2C%20you'll%20have%20%24110.25 https://www.investor.gov/additional-resources/information/youth/teachers-classroom-resources/what-compound-interest#:~:text=Compound%20interest%20is%20the%20interest,%2C%20you'll%20have%20%24110.25 http://www.atanet.org

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