Want to keep growing your business? One of the most important things business you can do is help your middle- and upper-income staff keep pace with inflation. And one of the most important things staff can do in return is deliver productivity gains. It’s a thesis we would agree with wholeheartedly even if we didn’t consider CIB Chairman and Managing Director Hisham Ezz Al Arab a friend.

Middle-, upper-income staff are being squeezed, even as state has protected low-income families and the working poor: Speaking with CNBC yesterday, Ezz Al Arab said noted that the government has done “an outstanding job protecting people under the poverty line and the [working] poor æ protecting low-income families. The ones who are being really impacted by the reforms are the middle class and the upper class. We saw the clear impact on their spending behaviour … it changed.”

Businesses, Ezz Al Arab suggests, need to protect their people: “For the middle class and the upper class, it’s a matter of time before income and productivity start to catch up to pre-reform levels.” It’s a pattern similar to that which we saw after the reforms of the early 1990s, he notes, saying that it was a while “before the ‘Crocodile on the Nile’ [rebound] affected the average income of society.”

Another wave of raises coming in the banking sector: Banks “will not compensate 100% for the price changes, but at least we voluntarily and aggressively raised average wages by about 20% last year, and I think there is another wave that is going to happen. That increase, by the way, [must be] matched by an increase in productivity as well, because the dangerous part is to raise wages with no increase in productivity, that puts you in a vicious cycle. Banking profits improved in the first half of 2017 and by the end of 2017 or early 2018, you’ll see another [salary] increase. I’d guess you will see over the coming 3-4 years we’ll catch up on productivity and income growth.”

Inflation this year has run at north of 80% for middle- and upper-income staff. That’s our take on the matter. One of the smartest guys we know has looked at inflation for his (very, very large) white-collar staff and estimated it’s running at something around 85%. That meshes just about perfectly with the peak increase in price of baskets of consumer goods (food and non-food) at two high-profile retailers whose data we’ve reviewed.