"Title inflation" isn't a new idea. The term has been around for a few decades and the idea has been around since the beginning of time, but it picks up serious momentum in economic downturns like this one. Companies can't boost salaries, so they offer up bigger and better titles to reward top performers. The New York Times reports:
Another round of title inflation may be at hand, because managers often dole out chiefdoms, directorships and vice presidencies in times of economic weakness as a substitute for raises and bonuses.
This year, Mr. Gross said, "employers will use the recognition value of a title" in lieu of pay increases.
If you get an inflated title rather than a salary increase, think of it like a promotion—it's nice for the resume and a boon when introducing yourself at cocktail parties.