Worker pay isn’t keeping up with inflation
axios.com
axios.com
And when you drill in more, there are other issues. For example, the housing metric appears relatively flat in real terms, right? Except, that doesn't tell the story for the majority of Americans. Housing costs are WAY up in cities as Americans migrate to where the jobs are, while housing costs are down in all the areas where jobs are disappearing. In practise, housing costs are actually significantly up for most Americans, but because the CPI is calculated across the entire nation, the government can claim inflation is low. This allow them to keep the fed rate low, which keeps stock valuations high. This LOOKS great and generates great headlines, but the reality is that most Americans are significantly worse off since the 1970s.
And then we come to the other elephant in the room: why are real wages flat? Given the incredible performance of the American economy since 1970, shouldn't real wages be significantly UP? This is yet another reminder that wealth is being squeezed from the bottom and funnelled straight up. As a non-American, it's heartbreaking to see efforts to unify the underclass completely derailed by this ridiculous race war. Poor people in America have FAR more in common with each other than the rich, no matter race. I really hope you all manage to set aside the obvious red herring of race and unite in tackling your staggering wealth inequality.
Yeah, well, it's not like things are much better in Europe. Far-right parties are now mainstream in most major EU countries, and their n.1 priority is exactly the same.
Signed,
a Brexit victim.
The issue with this way of thinking is that you look away from countries which might have good policies. These policies could be used in the US.
FR: Front national IT: lega Nord DL: AFD ES: Vox
They're taking over Europe because neoliberals are full of shit, and the left wing has their hands tied.
Normal people have nowhere else to go.
Well, they lost of a lot of their voters... because most of the middle-seeking parties adopted their hostile foreign policy and made them irrelevant.
In the South of England, maybe. In the North they barely exists, here "the enemy" continues to be South-Asian communities (which, ironically, were also heavily pro-Brexit, because of the correct calculation that British policies would then be forced to fall back on Asians for cheap immigration).
Two sides of the same coin.
A large section of people are left out of benefits of improving economy. Lions share of the gains go to the Uber rich people. And politicians play immigration card to whip up their voter base.
More or less exact phenomenon played out in Bombay, India. Except that the immigrants were Indians from other states (Gujarat, Tamilnadu etc). But when the political party did come to power they did absolutely nothing to improve their voter base’s life. Bombay continues to be a shit hole, worse so, that it was and the city floods every monsoon like a clockwork.
Even in the USA, the nation of immigrants, where we assimilate immigrants the best (comparatively), increased immigration has always leads to a reactionary backlash.
Being very pro-immigration, a big of Matthew Yglesias's One Billion Americans thesis, I have no clue how to move forward.
What does happen in Europe is far-right parties get a platform to speak on. The big continental countries have an election process that lets everyone be heard, and the far-right get heard plenty - allowing the electorate to smell their bullshit.
In the UK we don't have such elections. We have a two horse race, and token efforts given to fringe parties, and state media that are "maintaining balance" by constantly inviting candidates who haven't been elected after 8 attempts to frequently tout their bullshit (and critically without being challenged on any of it).
The far-right thrive here because they are unchecked, unquestioned, and ultimately not properly exposed. They relish in the "underdog", "cancelled", and/or "repressed" argument to win votes.
Also when our leading party receives £160k from the wives of former Russian minsiters to play tennis with the prime minister[0] you have to wonder who is really pulling the strings.
Dominic Cummings, an extreme libertarian[0], was in bed with various far-right (and also libertarian) people from the west, took office as the Special Advisor to the Prime Minister after riding the Brexit wave to success. A role that meant he had the power, without the need to be elected. He kicked everyone out that didn't agree with him, and/or had their own opinion(s). His one goal was to completely reform (read: dismantle) government. Unluckily for him, COVID came and revealed just what a cluster of dickheads he had left in government. Then he managed to get caught going on a 300 mile road trip after testing positive, including a trip to a Castle on his wife's birthday. The resulting mess of media coverage left the government with little choice but to "fire" him, but even that was a shitshow that took 6 months longer than it should have.
Now we are left with cabinet of useless, and I mean useless, puppets with no puppet master.
Side note: They (the right) also had clandestine social media campaigns. Cambridge Analytica's main purpose wasn't to identify who to send the bullshit to, it was to identify who to keep the bullshit from so that they wouldn't be challenged.
I actually think Cummings is an interesting guy and worth listening to, but I don't think he should be anywhere near the levers of power.
His ideas are kind of staid and recycled. He's smarter than Boris or most of the cabinet for sure but that isnt saying much.
Ultimately he rode a wave of mass discontent and somehow managed to fuck it up and achieve nothing while at the peak of his career when even the prime minister thought thought the sun shone out of his arse. He wasnt some genius mastermind.
> allowing the electorate to smell their bullshit.
I wish I was as optimistic as you. In Italy and France, far-right views are now solidly held by roughly a third of the electorate, year-in year-out. Party names and figureheads can change, but the message stays the same. In Germany it's a bit better, but then you have Austria and the Visegrad block, where they command relatively solid majorities.
I think if everything is laid bare - facts are proven to be facts, and lies are exposed as lies - yet the electorate _still_ vote it in, then that's fair. I'll emigrate.
But the biggest con about Brexit (as a particular example) is that _everything_ from the Leave campaign was bullshit and not one claim, pledge, or promise from the Leave "side" was ever checked, questioned, or since held to account and, in my opinion, it is _that_ which stinks the worst.
You need to look at the numbers. Far-right parties are growing everywhere in Europe... One is nearly the largest party in Sweden.
Many people do. I see this as a dangerous problem. Weimar Germany also really wanted the right to reign and it didn't turn out well. The party here was founded in part by two literal Nazis and a bunch of skinheads. I don't really care what people want when they want them to rule.
.. and on continues the shower thought.
Overall I'm worried, though. There are many hallmarks about the current political climate that have been present in the not-that-long-before any major conflict in history. I really, honestly, am worried there will be some large conflict in our lifetime.
I think you're right that we could definitely be on the eve of something about to happen, especially combining those observations with recent geopolitical updates.
So a society would need to be a bit intolerant to stamp out intolerance, making it overall more tolerant.
You _need_ tolerance to accomodate liberty. Otherwise those who do not tolerate your liberty will prevent it.
Perhaps the paradox of tolerance requires a deliberate agnosticism about how people unlike us live, a turning away from information that would turn us reactionary if we only had part of it. That used to be the default in an era of slow communication, but it could be cultivated deliberately if it's what's needed.
In other words, you want to prioritize tolerance over liberty.
Not even the most hardcore anarchist wants to live in a society where someone else's right to swing their fist doesn't end where their own nose begins, which is what true liberty entails, although they will vocally denounce any form of tolerance even as they implicitly accept it for themselves.
And it's worth pointing out that you don't even actually disagree with the paradox of tolerance in this regard, since the inflection point of tolerance/intolerance Popper claims should be a party refusing to recognize the rights of others or to act within legal bounds - the paradox of tolerance was written as a response to the result of German "tolerance" for Nazism at the time.
No one is actually arguing that mere civil political disagreement shouldn't be tolerated, but rather there is a recognition borne out of history that authoritarian beliefs, if not pushed against, will overwhelm the body politic in a similar way as cancer. Accepting the paradox of tolerance means recognizing that some prejudices and systems of belief are inherently harmful and that their adherents will never simply accept peaceful coexistence with others within the framework of a just and civil society.
Nazis will never play nice, and casting them as a victimized and oppressed group with legitimate grievances with whom we should empathize, and whose arguments we should consider (or reconsider, since nothing the far right has to say is actually new,) will not end well for anyone.
And to serve the forum's inevitable reflex towards whataboutism, this is not to let extreme leftism off the hook. There just happens not to be a surge in hard left ideology happening around the world at the moment, so mentioning the left in the context of this specific conversation for the sake of "balance" wouldn't be relevant.
Right wing media feeds off that hopelessness and apportion blame to a convenient target, one that usually can't speak up for itself. The homeless, immigrants, benefits claimants are favourite examples.
At the same time they portray the people responsible for the decisions that lead to that hopelessness as uniquely competent by taking a tough approach on the scapegoats.
The only real way of reducing the temperature is to make those people more secure, financially and socially. You don't care if your neighbour is a Polish plumber if you're not worrying about making rent/paying bills.
Conservative parties normally won't enact the measures necessary to cool things down, since they typically benefit electorally and convincing those already in the pipeline is extremely difficult.
That's probably not even the most pressing problem. The most pressing problem is that the rulers in a technocracy are also self-interested, and simply knowing how something works is no proof against being a bad actor. Recent history is rife with experts tilting things to their advantage, and deflecting criticisms of unfair behaviour by saying the unwashed masses simply didn't know enough about the decisions that just so happened to transfer a lot of wealth upwards doesn't inspire confidence.
If you don't respect democracy as a way to harness the wisdom of crowds, maybe you can respect it as a pressure-relief valve.
The problem are not the parties, the problem are the policies. Kicking immigrants out or licking them up will not improve the life of the local lower class, despite all the promises. It may improve the life of the rich, who won't have to fear bring mugged. But the reasons why immigration is happening, and why immigrants remain poor, will either continue (no one wants to do the dirty jobs) or mine too the local lower class (let's pray locals less so that they are competitive with immigrants).
Back in the 80s/90s, Sweden was known for bikini teams and ABBA. Now it's known for rape gangs. Sad!
The real problem is wage theft keeping large numbers of people poor. Whether immigrants or natives, the fact that you can work your whole life for a mega corporation and barely have money to eat is the problem.
Poor people are more likely to be victims of low-level crimes than rich people for a variety of reasons. When criminal immigrants come in, it's poor people they victimize.
It's also poor people who must compete with unskilled immigrants for jobs.
Rich people benefit from low-skilled immigration. They can isolate themselves physically from the bad immigrant neighborhoods, but also hire those immigrants to provide services for them. The immigrants will push down unskilled labor prices by the very simple laws of supply and demand. The immigrants will not compete on the labor market with the rich.
This is why the rich in the modern world have always been the ones pushing for more immigration, and the poor have always pushed against. Upper class businessmen and media people strut around like they're MLK but they really just want to pay their maid and gardener less.
Wages have not kept up with cost of living for 50 years in the US.
We need to stop pretending flat wages are some modern problem of inflation, and we need to stop pretending inflation is some problem caused by the pandemic.
The pandemic is just a convenient scapegoat and excuse for decades of congressional over spending and bad policy ultimately responsible for the current inflation.
Since Clinton the national debt doubled under every administration (Trump was on track if he won a 2nd term). Each administration also had trillion $ bailouts/stimulus bills. Biden already has a trillion $ stimulus ($1.9T), and that is blamed/justified on the pandemic. However, we can already predict the next administration will also have its own trillion $+ bailout/stimulus its just a question of what that will be “blamed” on to justify it.
Minimum wage hikes chew through profits and profits are pretty much the #1 legislative priority because that's the primary concern of those doing the campaign financing.
Same reason gun control wont happen no matter how many people get killed - ultimately its because gun manufacturers would lose money.
American politics is the art of trying to shape public opinion just enough to be compatible with the desires of campaign financers.
Additionally, even if profits were a moot point, the 2nd amendment is a culture war wedge issue that runs bone-deep for the average American.
Take away the profit margins and have a few more mass shootings and I imagine the 2nd amendment would melt away as easily as the 4th did.
The 2nd amendment will never go away as long as conservatives use it as a wedge issue. It's far too important as leverage, and they've been incredibly successful in cementing it further into law even very recently. My state just passed Constitutional Carry into law this year.
In the US, States can regulate, even those without strong ties to manufacturers. The fact that many haven’t makes me think the 2A is a bigger issue than profits.
Depends on what you mean by gun control though. Many (myself included) are pro 2nd Amendment so it's not just the gun lobby/NRA who oppose some (not all) regulation.
I guess my point is that gun control (whatever that means) won't happen not only because of gun lobbyists but because many Americans support gun ownership.
It didn't happen in Australia or New Zealand or the UK even though gun enthusiasts exist in all of those countries.
Idk exactly what you mean by organic, but if it means what I think you're trying to say, idk what's more organic than creating the Second Amendment which was created long before there were gun lobbyists.
> It didn't happen in Australia or New Zealand or the UK even though gun enthusiasts exist in all of those countries.
America is a different country isn't it?
I think the whole debate over gun control is not as important as people make it out to be, so I don't have a huge dog in this fight.
That said, 2A was not interpreted (at least by the courts, but also it seems from historical research, in public discourse) the way it has been until the late 90s and early 21st century, particularly in DC v. Heller.
Historically, there was generally broad latitude given to cities to have arms restrictions going back to the 19th century. My guess is that the crack epidemic and associated things in the late 80s and 90s is what shifted attitudes here.
None of those countries enshrine as law the concept of self defense in the form of gun ownership, though. The "right to bear arms" is considered the fundamental way to protect against tyranny in the United States. One of the founding fathers (Jefferson?) even posited that revolution was a responsibility of the people when a government became too overbearing.
Couple that with the Judeo/Christian concept of "value of life" and you have a people (who, though not Christian in practice, inherited these worldviews) that believes life is sacred and will fight for even the ability to defend themselves and others. Do note that the Judeo/Christian worldviews that benefited the West have been attacked and eroded over the last century and a half, and that the sanctity of human life is actually a big question mark for many. But there remain a staunch few that will continue to hold to their ideals.
I'll multiply that by 10 to guesstimate privately held companies, local gun stores, and the rest of the long tail. So let's say we're at $43 billion for the whole gun industry in the US.
Isn't that kind of podunk scale for an industry to have a rock solid hold on US politics? Snapchat alone is valued at $72B. Ford is $80B. Pfizer is $330B. Dollar General is $51B. Heck, Office Depot is worth more than S&W or Ruger.
Even smaller companies that don't make a product with a major govt/ military contract often have contracts as secondary suppliers of 3rd party or military spec'd parts, like scopes, mounts, triggers, etc.
A buyer could shut down a company that holds such a contract, but then it would just go back up for public bid.
Additionally, military standards for ammo are very high, and companies make money selling "factory seconds" (that don't meet military qa/qc, but are otherwise fine) to the public, which is an included perk of these govt contracts. And isn't a negligible fraction of required production.
So even a hypothetical buyer that would meet its contractual obligation to the govt would do so at an additional cost compared a company selling seconds and surplus manufacturing capacity.
In short, the market won't change without major policy change, no matter what major players might be hypothetically bought and shut down.
This isn't true in practice. Sure, company stock is not as great as the almighty US dollar, but can be used to purchase other companies, and its valuation directly affects how much cash the company can raise.
Not when a Constitutional Amendment makes that industry "too big to fail" because its thesis on the necessity of the right to keep and bear arms depends on there being an industry manufacturing arms to begin with (at least at modern scale,) and when the industry overwhelmingly supports one political party, driving animosity with fear-based rhetoric against the other.
You just don't have the same intersection of identity politics, culture and even religion with any other industry in the US that you do with guns, even if the money spent elsewhere is greater.
You mean at the dawn of the industrial revolution, before which, you know, everything was craft built?
The Second Amendment does very much depend on the existence that industry, because if the government were to allow small arms manufacturing to fail, it would be de facto abridging the people's right to keep and bear arms. It's the only industry that has to exist in the US, by fiat.
The amount of guns purchased by "gun nuts" reminds me of the stats on alcohol consumption: something like 80% of alcohol is consumed by alcoholics.
So you can mobilize a very rabid base politically.
Also, the gun manufacturers are tied in with the military and the diplomatic powers that be of the US (aka THE power brokers of the US government and the world).
I think this kind of monolithic homogenous group is fiction. I hear the same thing from other people about tech. Both sentiments lack a nuanced perspective.
relevant: https://slatestarcodex.com/2019/09/18/too-much-dark-money-in...
>all donations to all candidates, all lobbying, all think tanks, all advocacy organizations, the Washington Post, Vox, Mic, Mashable, Gawker, and Tumblr, combined, are still worth a little bit less than the almond industry. And Musk could buy them all.)
> As rich as Elon Musk is, he’s only one of five hundred billionaires, and some of the others are even richer.
I would assume if normal,everyday citizens started banding together to buy votes the corporations would up the ante and price us out pretty quickly, but as things stand right now there's no point without competition. Power of the free market baby!
I also think trying to pin the 'culture war' on gun companies is bizarre. Are you from the US? Your take on this seems like something you would see on MSNBC.
It’s...not.
> If money from Bloomberg or Soros helps you win
Neither Soros nor especially Bloomberg are or especially fund the left; Bloomberg is center-right, Soros is, frankly incoherent; while, yes right-wing anti-Semitic conspiracy theories focus on his funding of organizations to the left of the Republican platform, among the organizations he funds are ones like Cru, the organization known as “Campus Crusade for Christ” before its recent rebrand.
(The Democratic Party is a center-right to center-left coalition party, where dominant power is held by the center-right, neoliberal corporate capitalist faction.)
This is ... derailing. If Americans didn't love guns, they wouldn't go and buy guns. There is close to 400 million unregistered firearm in the USA. I don't think it's only Republican's. The companies who make guns will try to protect their business but at this point they are just secondary.
Also both Canada and Finland are in the top 10: https://en.wikipedia.org/wiki/Estimated_number_of_civilian_g...
A person with a gun is not necessarily dangerous. An idiot with a gun is. An idiot without is still as dangerous.
just adding some facts here -- 1.2% of gun deaths were accidents https://www.politifact.com/factchecks/2019/aug/21/jason-miya...
It's the same as all code having bugs, regardless of whether the programmer was skilled
We must also keep in mind that the most likely person to be killed with a firearm is the person firing it-- ie suicide. Furthermore we have to question what percentage of the ~37% of gun deaths as murders would be curbed by gun controls, particularly what percent of those murders will happen via an illegal firearm or just some different weapon (are we going to have knife control, poison control, strangle control...)
IMO America has a (largely male) mental health issue more than a murder/firearm issue, I suggest we treat the root not the symptom. How? apropos to the thread one potential solution is we might give people some economic hope via a good working wage. (Perhaps it's not the right solution, but still emphasize the roots not the symptoms)
some sources for food for thought:
[1]: https://bigthink.com/the-present/switzerland-high-gun-owners... Switzerland has lots of guns but few mass shootings
[2]: https://www.politifact.com/factchecks/2019/aug/21/jason-miya...
[2]:
I think part of the promise of increasing the quality of life of everyone after WWII wasn't only out of the goodness of the heart, but also to avoid reaching the level of generalized hate that made it possible in the first place.
That said, what’s eating real wage growth is outsourcing. It’s simple. If I can build a fridge by paying workers in China or Mexico $2/hr vs paying a US worker $22/hr in a manufactury plant, my competition will eventually lose market share and shutter if they don’t also move manufacturing to a cheaper labor market.
Without any import taxes to adjust for labor conditions and costs, thus will put downward pressure on stateside labor markets.
People know this. But they ALSO complain of stagnating wages, while at the same time NOT wanting their US manufactured good to be more expensive than those made over seas!
My school janitors used to be able to send their kids to college and afford a humble house. Retail store clerks (Married with Children). All that is now cheap labor --you can't expect to pay a mortgage and send kids to college/uni. You may be able to afford the cheap apartment and beer --you'll probably end up with some addiction, i nthat situation.
These days that janitor is farmed out to some company that hires either cheap foreign labor or sometimes illegal labor. We see this in chicken processing plants too. And people wonder why the middle class is hollowed out. And why black and white working poor are sick and tired or corporate antics.
[1] - https://www.nytimes.com/2019/05/28/technology/google-temp-wo...
Also, we can't cry "wages have been stagnant since the 70s" and also want to continue ex-patriating jobs and ability to command better pay.
I feel we can do things our grandparents couldnt even dream of (mines remember a time in his French village when horses would collect garbage, horses!) and that our parents suspected only. Hell the fact I can speak English and all it cost was a few taxe raises in education is already money well spent.
Tiring a bit to hear people bemoan a golden era where tv where black and white, religion prevalent, people disconnected, books expensive, knowledge hidden and medicine an embryo of what it is now.
Toil a bit, build more for your children and keep your eyes away from your selfpity.
Eg. Profit, tax, and rent
The numbers themselves dont actually matter. It doesnt matter if highly compensated to you means $88k or $150k annual compensation, $450k or $750k.
If a single earner cant buy a home outright in 5 years in that area, then the compensation isn't high enough compared to when wages were keeping up. There was a housing shortage in the 1970s too, so the supply side isnt a worthwhile deflection.
The oppression contest and olympics from the masses earning way less isn't really useful because that just conveniently perpetuates the reality.
Uh, source on the housing shortage in the 1970s being even remotely close to this level?
Because, yeah, demand outstripping the heck out of supply is the "deflection" I'd pick.
The same tech worker (or whoever a local municipality happens to be pointing fingers at) would pay $1200/mo in one area, or $7500/mo in the other area. A wealthy class of people have always existed that can pay rent or mortgage or own at pretty much any price.
The landlords are the greedy ones - the neighbors and corporations that were already there for the most part. I’m not arguing for anything (in case someone mistakes this for a rent control argument), just have been in enough cities to hear it all.
But they don't. Instead, landlords fight against the construction against additional housing so they can limit supply and increase prices.
I had a 900 sq foot, 2br, 1 bath apartment in the suburbs in 2012 that was $800/month. Each annual lease renewal was a higher price. When I moved out in 2015, the price was $950 at the time. If I had renewed, it would have been $1,100/month. That apartment now is $1,500/month. In less than 10 years, that apartment has doubled in cost.
Rising prices do not indicate a competitive market.
I agree with most of the rest of your comment, but none of that means that the landlords are price setters.
Nor does it show that discussing supply is a "deflection."
Perhaps property sales and rentals should require attestations about who offered what price and we can use that data to consider deterrents or levies on those who moved the price up from the prior owner or tenant. Sure there are some prospective occupants that will say a higher price just to skip the queue, I dont think they are really the majority of people even when well funded transplants descend upon a town. I think the majority just take whatever the landlord offers.
Taking the price offered for a particular property is not the same as ignoring prices. Apartment shoppers search for the combination of quality and price that best satisfies their preferences. I have a hard time imagining an alternative. Would that be going to an apartment search engine and simply picking the first result, regardless of quality and price?
When I go to the grocery store, I don't negotiate with the cashier. That doesn't mean grocery stores aren't competing with each other.
If a landlord chooses to consistently rent below market rates, for whatever foolish reason, then they'll probably wind up selling the building to someone who knows what the market rate is. It might take a while, but it'll happen eventually.
It is possible to have rising prices in a competitive market. For example, the automobile market is competitive and experiences rising prices. When I was shopping for an apartment not long ago, I saw several signs advertising discounts. This is evidence that landlords compete on price. However, lack of advertised discounts would not be evidence of a monopoly.
I'm curious if there are any theories besides wage stagnation that caused that change?
If this wasn't a predictable outcome when inflation is triggered, it would be imposed by design.
I think this is obviously false and hurts the credibility of the rest of this comment.
There are many pitfalls with measuring long-term inflation. How much did an internet connection cost in the 1970s? What about a computer? What about a smartphone? These modern technologies make peoples lives much better and were somewhere between impossible and impossibly expensive in the 1970s so an inflation metric can’t really take their price changes (from infinity to cheap) into account. Another is quality. Compared to the 70s, a new car is faster, safer, more comfortable, and more fuel efficient. Similarly, most houses are bigger and better in America today.
I think it is important to note that talking about long term inflation is different, and perhaps harder, than talking about short-term inflation which is what the OP is about.
Also it allows you to learn and raise your earning potential.
Finally modern transportation options less expensive than cars like e-bikes and e-scooters allow you to commute easier.
Sure, some people can benefit from remote work. But remote work is also not typically minimum wage. And to access those higher wage jobs, you’ll certainly need access to capital to invest in education.
Have you considered using an e-bike in the US? This could only be feasible in a minority of situations…
It sounds like a techie meme of what life could be, but is certainly not.
I share those believes and am living proof they work.
I also had the same thought - it's the one luxury they can actually afford if they save up.
I dont really get how people can look at that and think that these people are better off than a middle class 1950s US family. It's insane.
Heck, with the SD card slot I can film terabytes worth of videos and not worry about storage ever, and it lasts 2 days on a single charge.
That said, the extra $400 worth of difference between that and an iPhone 12 won't exactly turn a millionaire into a pauper. If $200 is the cost of necessity, then $400 expense on top of it to feel good for whatever reason is pretty damn low as far as spending goes.
It's less than furniture, less than expensive watches, less than anything close to luxury clothing (or even solid quality winter gear). $400 is a decent bicycle.
I don't get why people care so much about other people buying expensive things that they themselves wouldn't buy.
Some people are probably blowing $1,200 a month on stuff they don't need... but it certainly isn't the source of widespread income inequality.
I’m not saying there aren’t problems but even someone with a very low income who is forced (by American life) to run a car for a lot of their money is unlikely to be using a car from the 70s (50 years old) and more likely to use something from the 90s or 00s less safe and efficient than cars of today but still better than cars of the 70s.
Plenty of people lost their homes, renters had far less rights and although when looking at things through averages seems to indicate a better off middle class, the wages of the top 10% middle class (Mostly Unionized) were propping up a huge amount of the middle class that were grinding it out living paycheck to paycheck with none of the social safety nets currently in place.
I find it incredulous that so many people are blind to what is coming in the next few years, there is a huge sense of entitlement and victimhood based on some idea that the world was easier back then. We are coming out of what I consider almost 35 years of prosperity resultant from "Winning" the cold war but a reconning is right around the corner.
I don't expect many to take my advise but if I was in debt, renting a home and unemployed, I would stop bitching about minimum wage and would be finding a job real fast, the days of help wanted signs in every window are about to end.
There’s no maybe about it. In the 70s, average house sale price was 4x the average salary. Today it’s 8x.
How many lattes would you need to have skipped to have bought two homes at the time you bought your first? How many holidays would you have needed to skip to pay two mortgages while you were paying one?
That is the scenario - well except todays generation would only have one house at the end of the day, not two.
BTW in the 70s we didn't have lattes, it was just plain old coffee and what is this holiday's thing You are talking about? It sounds like something the privileged think they are entitled to.
The difference is those who managed to get on the property ladder in between the 70s and 90s saw falling rates and their LTV ratios being crushed as property prices sawed. Today many of those people live in 7 figure homes in the middle of prime city centers, or bought second properties and became landlords, intentionally or accidentally.
Young people today face the opposite. Just like stock market multiples, housing is at the highest the market can bare. Either we embrace inflation and wages rise, or interest rates rise, the market crashes, and millions upon millions of people end up underwater.
Many of those people live in their same homes, the city grew up around them. At risk of making a generalization, too many young people feel they should get to start at the top. People who bought homes in the 70s spent a lifetime accumulating their wealth, many of them have supported two generations of children and are still working to support the next generation. It is much easier to just throw up your hands and cry out "The World is Unfair". A choice is made to just give up rather put in the hard work required to succeed, that choice is about to go away along with the opportunities that todays youth have squandered.
Hard times are right around the corner, the good news is that housing prices are going to come down. The bad news is it won't make a difference to the people complaining about not being able to afford them as the cost/wage ratio means nothing when You don't have a job.
I wouldn't call a dual income couple in their mid 30s paying >40% of take-home pay for a 2 bedroom flat "the top", but ok.
I guess my parents who started with a 3 bed family home on a single blue-collar income started at the fucking apex.
IDK your situation but have heard the same excuses for a long time. You have the ability to make changes before You get tied down with responsibilities like kids and debt, make the choice to change your lifestyle now before that choice is made for You.
And we're not DINKs by choice. We want kids.
I put 50% of my personal take-home salary in to savings/investments and have been doing so for 3 years. We have decided not go give more than token gifts this Christmas as we really want to reach our spring savings goal.
Meanwhile house prices have gone up 10-15% over the last year. I earn good money but if it's this tough for me then believe me when I say it's fucking hopeless for most people my age.
I've also heard this bullshit before from older generations, including my parents. Sure they faced hardships. Different kinds of hardships. Unemployment. Inflation. High interest rates...but don't think people have it any easier today because they're they spend $30/mo on a phone contract. Spending $30/mo on Netflix and Disney+ today is like spending $4/mo on whatever crap people wasted money on in the 1970s. They did it too.
Mark those words my friend...There is truth in them and one day not too long from now that same BS will be coming out of your mouth, I guarantee it!
On a side note, put some of your savings into physical precious metals it may very well be the only thing that will allow You to prosper in the next decade.
But when you can't accrue wealth or assets (for all of the reasons other posters have listed above), you probably don't end up becoming more conservative as you get older. Quite the opposite.
You're trying to tell us the rules for a game that no longer exists in the way you played it
But then, probably, so would assets (stocks and real estate). I don't see an easy way out of this mess...
When prices are lower, so are deposits. When they're consistently increasing for long periods (with low/no wage growth to boot), deposits become impossible to achieve because price growth outstrips the ability to save.
What you end up with is a large class of renters who can clearly service a mortgage (they service their landlords) but cannot save for a deposit.
Was it a walk in the park in the 70s and 80s? No. But it was possible for a great majority of people. These days, without help for a deposit, you're screwed as an "average" worker in a population centre.
The house that seemed affordable with no car payment was a little over $9K (down payment of $1800). Adding in a $50/mo car payment took the affordable house down to a little over $8K, less than half the price of the median home in 1970.
Was there a minimum wage worker sometime in 1970 who bought a house and a newish car? I'm sure there was. Was it typical to do so? I don't think so.
Refs: http://www.freddiemac.com/pmms/pmms30.html , https://news.ycombinator.com/item?id=29590190 , https://www.bankrate.com/calculators/mortgages/new-house-cal... (I used a 10x multiplier, so I modeled in the calculator someone making $14.50/hr, a median house of $170K rather than $17K, etc, and then divided them by 10 to cite the figures above.)
Wage: $7.25/h
per-month affordable: $362.50
median home price: $374,900
3.519% fixed, 30-yr
20% down
required monthly payment -> $1,350
In fairness, the comment chain you're responding to is talking about the thing you're responding to in your comment, but I think the increase in unaffordability at the minimum wage still speaks to the problem: while it wasn't likely to allow home ownership in the past, but it's even less possible now, and that translates up into the higher wages where people then might have afforded a home, but cannot now.
Plenty of maps have been drawn to show that minimum wage can't even afford to rent median 1-bed apartments.
You can look at these retired 70-something boomers driving nice cars, owning a house, and taking a couple trips a year and assume they lived on Easy Street their whole lives when in fact they were probably struggling to pay bills 40 and 50 years ago as well.
Why should the minimum wage not provide a sufficiently secure life for the worker?
I say this all the time: if you can't afford to pay your workers a living wage you can't afford to be in business.
Source: Economic Policy Institute
https://www.epi.org/publication/wage-workers-older-88-percen...
Historically, this is flat-out wrong. It's a lie. It's just a new talking point invented by corporations to convince the population to vote against minimum wage increases.
There's no hard rules about what wages should or should not be, as with any other market price. A business will pay however much they need to attract and keep the labor they need. If no one wants to work for them they need to increase the wages they offer, which may in turn result in higher prices for customers which is also an undesirable outcome. If what they provide is of enough value that customers will continue to pay for it then the higher costs can be absorbed, if they don't, they will fail. If they can't attract workers they will likely also fail. Delivering value at prices people are willing to pay while still covering costs is ultimately what keeps a business in business.
I sometimes wonder if minimum wages are a net benefit at all as it creates several distortions. Some laborers aren't worth paying a minimum wage, they wind up earning nothing from not having work instead of what their true worth is and being able to build up skills. I think it could also remove some negotiating power from laborers. Businesses can peg their wages at the minimum and balk at those asking for raises, they pay the legally mandated price for that tier of work after all. Try to find a new job and you would also find other businesses doing the same, not paying an iota more than legally necessary instead of a more fluid labor market with people switching jobs for marginal gains, driving wages up. What may more naturally be a range of prices, both higher and lower, gets compressed to the minimum, unless that minimum is so low as to not have any effect on wages at all because no one would willingly work at that price.
Yeah, I think it's a tragedy that we have constructed a society where everyone doesn't have basic needs met. I think it's a bigger tragedy that the alternative to the current system is considered idealistic. You don't have to agree with me, but if nobody talks about the ways that things could be, not the way that they are, then things will never change.
I'm not sure I follow your last paragraph. Are you suggesting that minimum wages are bad because it sets a minimum for employers to pay as though without a minimum wage they would pay a rate more in line with value? If folks earning a minimum wage today, in a world with a minimum wage, can't afford basic living expenses, would you expect more people to afford basic living expenses without a minimum wage? If so, can you justify that? If not, what are you optimizing for?
I think substantial increases in the minimum wages force those people into a lottery where some are made better off and others are made worse off, but where the ones made worse off are made much worse off (out of work, higher barrier than today to finding work, everyone around them has more money and everything is more expensive than today).
Monetary value has no bearing on actual value. For example, a smartphone is only $1000 because some people were paid $0 to produce it. Did those people not produce value? Take a fast food hamburger, it only costs $1 because it's not real meat (mostly), and the person who heated it up is being paid a wage with which they cannot afford reasonable housing and healthy food.
> Are you suggesting that minimum wages are bad because it sets a minimum for employers to pay as though without a minimum wage they would pay a rate more in line with value?
Yes, that's basically what I'm saying. Most literature focuses on people being priced out of the labor market (see https://www.cato.org/policy-analysis/negative-effects-minimu..., for one such analysis).
I'm also suggesting there could be other effects due to loss of agency over one's labor price, similar to how collusion of employers to fix wages harms employees. Maybe someone has studied it, maybe not.
>If folks earning a minimum wage today, in a world with a minimum wage, can't afford basic living expenses, would you expect more people to afford basic living expenses without a minimum wage?
Ultimately prices are fluid based on what people can afford, especially so for local markets like housing. If minimum wages increase one would expect increased housing prices as those prices were set in line with what people could afford. If they make more, now they can afford to pay more. If you were making marginally above minimum wage you now also want an increase to protect your increased buying power.
W.E. Upjohn Institute for Employment Research found that modest minimum wage increases have minimal affect on prices increases while larger ones can create price increases. This makes intuitive sense, based on market theory. https://research.upjohn.org/cgi/viewcontent.cgi?referer=&htt...
And with that, you create a drop in the standard of living, where even having your own bedroom is considered a luxury.
> Some laborers aren't worth paying a minimum wage, they wind up earning nothing from not having work instead of what their true worth is and being able to build up skills.
No, what happens then is they work 3 jobs to survive and die an early death.
> I think it could also remove some negotiating power from laborers. Businesses can peg their wages at the minimum and balk at those asking for raises, they pay the legally mandated price for that tier of work after all.
That makes absolutely zero sense whatsoever, that someone would make MORE money if there wasn't a legal minimum? What?
Laborers don't have negotiating power in the bottom end. As I said above, there are enough desperate people to create a race to the bottom. If you eliminate the minimum wage, then you're not giving them leverage, you're just creating more desperate people.
My grandmother only started working part-time ~1980 as things started getting harder to afford on a single salary.
I think about this a lot because even with two people working full time we couldn't afford a house (in the same city) until we were in our late 20s, without a child. Still have never owned a new car.
The answer to the question of “are we better of than we were in 19xx” is somewhat subjective.
Take your points: cars are faster/safer/more comfortable/more fuel efficient and houses are bigger and better.
Ok so cars and houses are better today than 1970, but how does that relate to us?
1970 Average salary/median house cost/median rent/new car: $9,870/$17,000/$108/$3,542
2020 Average salary/median house cost/median rent: $56,310/$329,000/$1,463/$45,031
So yes cars are better, houses are bigger now than 1970; however, people and households are less likely to afford these things, and are significantly more indebted now than 1970.
Also there is the elephant in the room of college loans which were essentially non-existent in 1970, but have indebted 10s of millions of kids, nearly 1 million of them default on those loans ever year, financially ruining their lives (good luck getting that car loan, mortgage, credit check on a apartment).
They have to because services are distributed and it's super expensive and disruptive to sell an owned-residence.
In my experience, it's clearly true overall. In the 1970s, say, you're probably looking at a car in the snow belt lasting 5 years because of rust and 100,000 miles was generally considered very high mileage.
This also came with a caveat as automatic is more expensive to manufacture and repair.
What is the pro of manual transmission? I used to have those cars in the EU and thought it was just an annoying extra thing I have to pay attention to when driving.
1. enjoyment
2. keeps you awake
3. more reliable
4. more control in stuck or slippery conditions
5. thieves don't know how to drive them
6. the kids are terrified of it and won't ask to borrow it
7. can push start the car
8. can restart the car while moving if the engine stalls
9. can coast
10. can drop the clutch and get off the line faster when drag racing against some teen at the traffic light
11. get to enjoy double clutching and mastering heel-toeing and pretending you're an F1 driver
12. The Cat cannot reach the clutch pedal, frustrating its plans for putting me in the trunk and depositing me in the Kat Fud Factory
13. you can nurse the car home and to the shop with a broken gearbox. With an automatic, it's a tow truck every time
14. the sheer joy of a winding mountain road, a powerful V8, picking the gear for the next turn, managing the traction and engine speed, etc.
That said, this is also a clear shift in consumer demand too - a 1970s $3500 car is going to be a sedan, small, and pretty featureless. Compare that to a $20k Corolla today - which is the same proportion of median income that the $3500 car was in the 70s. It's larger, more reliable, safer, and has a whole bunch more features.
But no one pays cash for their house. They get a mortgage and so the monthly mortgage payment is (mostly) what matters. Back in the 70s you're paying 10%+ on your mortgage while today it's more like 3.
https://fred.stlouisfed.org/series/MDSP
This is an unusually good time to be a home owner. You can borrow at near 0 or even slightly negative real interest rates and buy an asset that is almost guaranteed to hold/increase in value.
People live in homes for their entire lives. If they decide to be owners rather than renters, over the course of their life (actually, typically somewhat less than their whole lives) they will end up mortgage free. This is an important component of most people's retirement planning, in fact.
What's the cost to get to that point? It used to 2x annual salary, it's now nearly 6x annual salary. That's 4 full years of earnings which vanish into owning a home. If you do not reverse mortgage or sell during retirement, you effectively "lose" this money.
It's just not. You're not accounting for the interest paid over 30 years of a mortgage.
You might be arguing that 1970's cost-as-multiple-of-earnings plus 1970-accumulated-interest exceeds 2020's equivalent. Is that your point?
Your comment seems disingenuous. You're also discounting the fact that you need a large downpayment (10,000+) to even get a mortgage in the first place. Do you not live in the USA? Housing prices are a real problem for my generation.
In other words, in that environment it was feasible to stretch to buy a home even at a high interest rate, because you knew that every year your fixed payment would decrease significantly as a share of your income.
Not paying attention to the total and only focusing on the monthly payment is how most people get into future crushing debt and very much not a good thing.
Also, health care/insurance costs. Growing up as a kid in the 1970s/1980s in a blue collar household, my father's job provided health insurance at a far lower % of salary than is common today and with minimal out of pocket costs for receiving care. Also, retirement. Back then most companies provided defined benefit (pension) plans rather than defined contribution (401K) plans - you put in your years and then you retired at a decent % of final salary for life.
In 2021, internet connections and cellphones are both expensive and mandatory if you want to participate in modern society. Your minimum wage job probably texts you your schedule, so if you don't have a cell phone, you can't even work. Many government forms have been moved online, with legacy options either unavailable or poorly services. Payphones are all but gone. If you're lucky to have a local library then maybe you can get some time on a decrepit computer with slow internet access, but the majority of the poor rely on their cellphone for internet access.
You also didn’t mention having to go to the library (distance + fuel/car/travel costs + more time) for information, finding jobs from newspaper advertisements or word of mouth.
But the claim I was disagreeing with is that most Americans are worse off now than in the 70s and the description “most Americans” does not match the sort of very poor people whom you describe. So I feel this comment is only partially relevant
I’ve found that shapes people’s perspective on the topic significantly.
In 1970, obviously nobody expected you to own a smartphone because it didn't exist. Noone had access to such a thing. Not so in 2021 western Europe. The example very much holds in that sense. You could fully participate in society without that expense.
I'm not speaking of keeping up with the Joneses here. I'm speaking of pervasive implicitly embedded demands on people's lifestyles.
What do you think about the effects of the way housing insulation requirements are often written?
What do you think happens when you invite someone to a party at your place in the countryside that is only reasonably reachable by car?
One of the best ways to get a feel for this kind of thing is to go live in an area with significantly lower median purchasing power for some time, a place where the average trustworthy hard-working person has difficulties making ends meet. I've done so. Even if I lived a lifestyle of relative luxury myself, it helped widen my perspective. I can absolutely recommend the experience!
The idea that no one was expected to own cell phones so they didn’t enrich our lives is clearly false.
Can apply this to any technological advance. So for eg. in the 1800s no one expected you to own a car. So the invention and subsequent technology driven deflation of car prices didn’t make everyone’s lives better.
The two are not opposed. There is significant overlap significantly in many ways, even in the way government treats the very definition of poverty. In most countries, you'll find that poverty is defined as a percentage of median income.
Let me try to rephrase to make this more tangible. The minimum of things and services I need to procure to get minimally acceptable social inclusion is lower in some contexts than in others. 1970 versus 2021. Silicon Valley versus rural Latvia. I hope you get the point.
> The idea that no one was expected to own cell phones so they didn’t enrich our lives is clearly false.
I was certainly not claiming that! Cell phones or cars can clearly enrich the lives of those able to afford them. Their existence also creates a potential gap between haves and have-nots though.
Or to formulate it more sharply, you couldn't be poor because of not being able to afford a cell phone in 1970. You can be poor because of not being able to afford a cell phone in 2021. Does that mean a cell phone is a bad thing? Of course not!
So.. how does that imply that people are worse off now than in 1970? Your entire thesis seems to be that the jealousy people will feel from seeing others have things they don't will outweigh all of the material gains of the last half century.
That seems.. obviously false? to me
As an American, I don't subscribe to that thesis. At all.
What I do see (as someone in his mid 50s) is that the biggest difference is that folks back then believed (and it actually happened for many) that they would be better off than their parents.
That's no longer the case. There are a variety of reasons for this, not least of which are the systematic[0] changes to our economy that pushes wealth and resources to the top, at the expense of those at the bottom.
This didn't happen by accident, and I'm not really surprised that folks here on HN aren't focused specifically on that issue -- primarily because most of us are beneficiaries of said systematic changes.
The worst part (IMHO) is that these changes will only benefit those at the top for a limited time. Given that 70% of the US economy is consumer spending, taking purchasing power away from the vast majority of consumers is a recipe for a bad economy.
Increasing wages and safety nets makes good economic sense, as it broadens the market for consumer goods, makes it easier for folks to act in entrepreneurial ways, and in the medium to long term expands the economic pie, creating a healthier, more resilient economy.
Pushing wealth/resources to the top just doesn't do that at all. How many yachts/houses/cars/dresses/suits/pizzas/kale smoothies/etc. can one person reasonable purchase/use?
Even if you spread the money around more broadly, the wealthy will continue to be wealthy, and the rest won't have to work two or three jobs just to feed their kids boxed macaroni and cheese five times a week.
But I don't see how this means I'm ideologically committed to the absurd thesis that we haven't seen quality of life improvements for the average person in the last half century - going from a time where we had only recently eliminated actual starvation in the US, schools were still basically segregated, inflation rampant, a draft, etc. etc.
I don't believe my comment even implied that.
Rather, I was providing my own take on your assessment of markvdb's comment[0], which I don't disagree with, I just wanted to address the elephant in the room (the systemic changes pulling more wealth/income to the top at the expense of those at the bottom) that hadn't been addressed.
That's not to say you didn't make a good point. You did. But I felt there was more to say.
The point is that there are many things you are now required to have to meaningfully participate in society, that were just not required in 1970. For example, to get vaccinated in my country for COVID, you need to access a web page, sign up using email, and you'll get an SMS notification when your registration is accepted.
So, without an internet connection and mobile phone, you have to rely on someone else who does own one of these.
The conclusion being: someone who can't afford a mobile phone and internet connection may be poor in 2021, even if people without an internet connection or mobile phone were perfectly well off in 1970.
I guarantee you that if you live in the developed world there are alternate pathways to getting vaxxed.
> someone who can't afford a mobile phone and internet connection may be poor in 2021, even if people without an internet connection or mobile phone were perfectly well off in 1970.
Funnily enough, a greater proportion of people have smartphones in the house today than had landlines then (60s & 70s), so even by this (absurd) metric where having a smartphone is equal to having a landline in terms of utility/welfare, we still have seen material improvements.
I am surprised that this has prompted such an argument here. I am curious as to the ideological motivations behind denying any progress in the last half century, this sort of rhetoric didn't seem nearly as popular even a few years ago.
This statement seems obviously false to me and is what I was disagreeing with. This entire conversation was spawned because many people felt the need to defend this statement.
I can't speak for anyone else, but I don't disagree with your point at all.
Materially we've got more stuff, sure. The issue I pointed up (and perhaps that others were alluding) is that social mobility has been negatively affected over the past 50 years.
And the prospect that one won't be able to "succeed" (whatever definition of success you want to use) because the deck has been systematically stacked against you in favor of those who are already wealthy is definitely a factor in why folks feel they're not as well off as they'd like to be.
What's more, it's been getting harder for the poorest Americans to make ends meet for quite some time. And that situation has been making its way up the economic ladder too. That result is no accident either.
As such, it's no wonder many folks wonder why they can't get ahead even if they do what they're told is necessary to make that happen.
That's a cultural and economic problem that has been growing for a long time. And one that cheap gadgets and technology can't fix.
What could help is sharing the economic benefits of the increased productivity enabled by technology. But we're not doing that, are we?
I'm really not at all confident this is even true, unless you are restricting your sample to white people & men.
Seems like social mobility for women, who comprise half the population, is markedly better than it was 50 years ago.
I don't think it is true that it has been getting "harder" for people to make ends meet for quite some time. Again, in the time period we're comparing to, people were quite literally starving to death/dying from malnutrition at times. Nowadays, people have their ends met well enough that this does not happen in America.
This is in spite of rampant inequality, but still - measurable improvements on pretty much all measures. Really, many of the bigger causes of early death now are due to self-destructive things people can do with more material abundance.
It's not like everyone in the 70s was walking around completely depressed waiting for some breakthrough in computing technology so they could carry a computer in their pocket and ease all their ills. People could be content and maybe even happy without access to technology that didn't exist. Many Americans would likely be happier if they got rid of the "smart" part of their phones.
People can be very content and happy with very basic necessities. Some of the happiest people on the planet are renunciate monks and nuns based in brain scan research (for eg mathieu richard)
And of course people can be depressed even to the point of being suicide while being wealthy. (Any number of high profile cases)
But it's also true that these things become necessities when everybody is expected to have them. There is a low but non-zero level of "keeping up with the Joneses" you have to do just to keep living your life reasonably, because things change around you. Job applications are done over the internet now. Most higher education requires a good computer, webcam, and internet connection. You hail a cab with your phone. People suck at giving directions because they assume you have GPS. Stuff like that.
So I think it is fair to price some of these "luxuries" into the cost of living even though in the past people got along just fine without them.
Overall, I think having the Internet makes my life significantly worse except for how it makes it possible for my family to participate in the modern education and the modern job market. It's a benefit mainly because you're shut out from things that previously did not require it if you don't have it.
[EDIT] ~$140/mo is my home Internet service and roughly what it costs for Internet service on two cell phone lines. I'd probably keep phone + SMS service even without the societal requirement to have Internet service.
* for most people they'd be paying for the internet/cell phone regardless of whether it's required for their job or not. I doubt the pandemic pushed up internet adoption rate by much.
* $140/month seems to be on the high side. are you really paying that much for the bare essentials? Or are you paying for gigabit home internet and a 25GB/month cell plan?
We can’t argue that quality of life is sooo much better when production is such a mess. The only reason we hear the complaints is because of quality of life.
People with money can handle $1 more for an order of pretzel nuggets but make them wait and extra 2 minutes for it and the labor shortage is all over the news.
America's model of making a bunch of random models and shipping them out to sit on lots in the hope someone wants that model is bizarre.
In most other countries you order exactly what you want and they build it.
Same thing - only difference is they don’t have cars in stock. It’s done on demand.
Chrysler pulled this on me so I substituted the good with one from another maker. Months later Chrysler called with all trims magically available. This was well before the panorama but during the trade war.
Not for nothing, but I’d bet my crispest dollar that our quality of life is still outrageously good. If you have to wait a few months for the $60,000 custom build F150 of your dreams, so be it. If someone’s gotta wait 5 minutes for their McNuggets, it’ll build out their patience.
Sure the system is under stress, but the problem is and always was us. The wealth inequality exacerbates it all and we’ll all eventually act like animals over it.
But let’s not pretend like that’s true for everyone, nor that technology is a panacea for social and economic problems.
Formal education is more expensive. A balanced diet is harder to get, and more expensive. Housing is more expensive near your work. But gas as well if you live far from it.
Today's people debt is higher, and you can't easily work one job, raise a family, and afford education plus buy a home.
It was more common in the 70'.
The promise of salvation past generations had with their working lifestyle doesn't hold truth anymore. I think that's why we see more "new religions" popping up right now, like conspiracy narratives, new nationalism, "white man identities" (the group without a distinct identity in the past; their self-efficacy experiences seem to be in decline, too), the MLM-fantasy of self-employment/all-in hacks/dire fight for "untapped markets" (podcasts, porn, stock market ...).
Late stage capitalism.
Sources:
https://sail.gmu.edu/program/hunger-banquet-2021/hunger https://www.npr.org/2020/09/27/912486921/food-insecurity-in-...
How many people starve to death in the United States?
What good does this do to someone with nowhere to live and that can't drive to work?
This is the elitist fallacy that somehow having access cheap smartphones and plastics mostly manufactured in China at the back of our working class jobs make your life better while all else indicates life expectancy and quality of life across the board is declining for majority of Americans. Many Americans including my millennial generation feels we are worse off than our parents generation.
How does having cheap access to internet makes the quality of your life better if I may ask? Does it help with the ballooning cost of housing prices throughout the country? Or healthcare? Or education for that matter? These are three basic costs and they all have gone over 100% in most cities in a decade or so. Not to say people are more lonely and isolated than they ever have been.
Whoa that's a bit of a reach no? How about the ability to drive around with GPS? Or stay easily in touch with family living far away? Taking photos of your baby and having it stored on the cloud for free? The ability to learn almost anything for free?
I'm not saying it's all great, it isn't, but we can't deny the benefits.
Maps, and the ability to read them.
> Or stay easily in touch with family living far away?
Phones, you know good old land lines
> Taking photos of your baby and having it stored on the cloud for free?
Why do I need physical photos stored in the cloud?
> The ability to learn almost anything for free?
Have ya heard of libraries?
Does technology make these more convenient? Absolutely. Does it make them materially better? Not in my opinion.
Things have gotten better, but in lots of ways they have gotten worse.
You basically need another passenger with you otherwise you'll have to do a lot of stops. I'd even say its a bit risky to drive like that.
> Phones, you know good old land lines
So you are saying having a high def video call with my brother living across the world, for free, is just like calling him in the 60s? It used to be crazy expensive to call abroad. And you couldn't see!
> Why do I need physical photos stored in the cloud?
Do you physically develop all your photos? If you do you are an exception to the rule, most people develop maybe 1% of their photos.
> Have ya heard of libraries?
Come on now. Try learning C++ in a library, good luck with that. Also, it's only the rich world that has high quality libraries accessible to everyone.
Oh, FFS. Pre-GPS, I would look up my destination on a map or street atlas and learn the route. If a portion was especially tricky, I might jot down a few reminders, or pull over before that leg and review the map.
Is GPS a wonderful convenience, especially with traffic monitoring & such?
Hell yeah, I love it and wouldn't want to go back to maps without a damn good reason.
But don't pretend it's somehow vital.
> So you are saying having a high def video call with my brother living across the world, for free, is just like calling him in the 60s?
The vast majority don't use video calling.
Still, constantly available communication is, IMO, a huge net positive.
> Do you physically develop all your photos?
That was obviously how it worked before ubiquitous digital cameras.
Photo situation is better today, though I might argue that the low marginal cost of each photo leads to people robbing themselves of vivid memories of what they're seen. There's some research that supports that idea, though I don't have a reference immediately on hand.
> Come on now. Try learning C++ in a library, good luck with that.
That's exactly what I did. Checked the ARM out of the library. Eventually bought my own copy when I decided it was worth it.
As much as I love the wealth of information available on the net, I sometimes miss how good libraries used to be.
Driving with maps doesn't require another passenger or a lot of stops, generally. You plan your route with the map before starting out, and if necessary write the turns on a piece of note paper. You may need to stop and consult the map if you miss a turn. I'll grant that GPS is more convenient, but maps worked better than you think they did.
Phones vs. video calls, I'll mostly grant you. Long distance calls were expensive, and video gives you facial and body language cues. On the other hand, audio quality was a lot higher when everyone was on land lines, so you didn't need those cues as much to make up for indistinct audio.
Physical photos: before 2000 or so, everyone developed all of their photos. Most cameras were film, then. Even when digital cameras came into widespread use, it was common to print the best pictures. People really only started not developing photos when smartphones became common.
Libraries: I learned C from a couple of textbooks, and C++ (such as it was in 1993) from a book published by the company that sold me the compiler. All of these would have been available in a reasonably sized library, or in a small library via interlibrary loan.
You ignored that part of my argument about only the rich world having high quality libraries. What if you'r from India or Africa or even rural America? Now even a poor Indian can solve Hackerrank challenges on his phone. It's not as easy or as convenient but it's much better than his prospects 30 years ago.
For photos I shot B&W (which I printed selectively) and then slides. But most people just took their roll of print film to the pharmacy or whatever and got a stack of 3 1/2" x 5" color prints back.
>> Try learning C++ in a library, good luck with that.
How do you think people learnt to code before the internet? I borrowed large textbooks on Basic/VB, C++, and Turbo Pascal from friends and libraries. And this wasn’t a long time ago. I did this as recently as 2005.
>> Do you physically develop all your photos? If you do you are an exception to the rule, most people develop maybe 1% of their photos.
Why would you take photos and not develop them? When I finish a roll I take it to the local store and they develop the photos. I then put them in an album or store them in another way. People have been doing this for a long time.
>> So you are saying having a high def video call with my brother living across the world, for free, is just like calling him in the 60s?
Most people I know disable video in meetings. The majority don’t do video calls with friends unless they have some friend that calls them that way. I find audio calls much more enjoyable that video calls and I definitely don’t think I’m in the minority there. If you haven’t seen someone in years and they live far away a video call might be nice but in most cases audio is not only enough, but better.
>> You basically need another passenger with you otherwise you'll have to do a lot of stops.
Most journeys people make repeat. You learn the route. The modern obsession with GPS is so we don’t get there a minute early or late. For infrequent, really long drives you can plan your trip in advance, noting down the steps of the journey rather than following the map constantly. It’s also amazing how far you get just following road signs when you know the general towns on your route.
I'm not denying that, I'm just sating progress was way slower - especially for newcomers before the internet. Imagine trying to solve problems without Google or Stackoverflow when you're a 15 old kid trying to learn programming. You're stuck on some shitty installation of Linux or some missing package and have no idea why the compiler gives this error message. How do you even get Linux? Have no idea how they did stuff back then but it was for sure harder to just to get something up and running. So easy to give up. Programming in that era used to be something 1 in maybe 50 children tried. It was no way near as accessible as it is today.
The flip side of that is that since it's now easier for everyone to learn new skills and solve problems, the requirements and expectations from workers pretty much went up proportionally.
It seems to me like comparing a shovel to a ditch digging machine.
It is possible to navigate using maps. But not practical for the mass audience of GPS who can’t use maps. And impossible for the industries that require GPS (uber types).
Technology is a multiplier that increases the returns on things my removing labor and letting it focus on other, more productive things.
Similarly, arguing that the internet isn’t 1000x easier to learn things because libraries exist is odd to me. Have you ever tried to use a book in a library to find that it’s checked out? Or not available at all. Inter library loans used to take 30 days, if I had access to a good library, and now that information is available to me for free.
This doesn’t mean the world is perfect or that we don’t still have so much work to do. But it’s just an odd perspective that seems unmoored from reality, since these things can be objectively measured.
I've travelled extensively pre-turn by turn navigation using physical maps, i spent a year motorcycling across mainland Europe in my early 20's using nothing but physical maps, I did the same but in the US during the early-mid 2000's.
Was it as easy as sticking a zip code into a magic box and having it tell me where to go and when to take a turn? Probably not. But it wasn't much more complicated because I know how to read maps and can remember things for more than 10 seconds.
These guys are screwed if they ever come across a treasure map.
Yes today's communications are nice but we really didn't need GPS or cell phones to leave the house however primitive paper maps and, yes, some degree of planning seem.
Interestingly, it's often MORE efficient than using Waze or some navigation app with ADHD that can't see the forest for the trees. I pity those that never learned to see the forest.
And I've frequently commented that early career me would be incredibly frustrated by the difficulty of accessing information about just about anything were I to be transported back in time.
But it's also the case that we were actually able to travel, communicate, and learn about things in 1990. Yes, it was generally higher friction and relied more on physical artifacts like maps and printed photos but we were able to manage quite well.
By uber types, you mean taxi types? The same taxis which have existed in some form for a hundred years before GPS was invented?
Watch an old movie-- like the Graduate, or the funny comedy it's a Mad, Mad, Mad, Mad world, people had maps and asked for directions at gas stations.
There are also any number of plot points that revolve around not being able to reach someone that also wouldn't make a lot of sense in general today.
As an example, I lived in NY for three years and recently when I went there at my cousins place (who is GenZ) our batteries died and we had to walk our way to subway. Despite living there all his life my cousin was having a hard time finding the subway station in Astoria (because he just uses the Map) whereas I could remember from my vague memories of alleys and shops to find out rather quickly.Or how about driving into that diner you have never been instead of looking at Yelp or Google review and finding the best reviewed store? You deny yourself simple pleasures like that when you rely too much on Google or other technologies. I am not saying they don’t have their places but saying without them our quality of life would decline is a fallacy.
I would also argue writing letters and occasional/less frequent long formed phone calls were much better than frequent short form SMS or DMs which most of the time come off as devoid of same level of care or efforts. Keeping in touch with people we know have become such a low effort thing, try writing a letter or making a phone call next time instead of texting and realize how much more effort it required.
The flip side is that technology has made it more likely to not live near friends and family, and the accompanying challenges for mental health.
The measures for a quality of life I mentioned are something that every American or anyone in a first world country has to bear no matter what. Housing, healthcare, education. All of them have disproportionately gone up while the wage have stagnated. Average middle class family can’t afford to buy a house in most cities now, same with education without 22yr old kids taking on 150k loans. Or healthcare being the mess it is. But sure, everyone has a cheap smartphone and access to socials where they are busy fighting the culture war so everything is fine and dandy right?
Comparing utility providers to ensure you're not getting absolutely shafted? Made easier by the internet!
Booking flights? Made easier by the internet!
Having to go through your bank statements to ensure you're not being ripped off by a shady fly-by-night operator? Made easier by the internet!
/S
We know many young people are dying early deaths of despair. We can make mental health easier to access (there’s a lot of unnecessary bureaucracy just to get pills for well understood mental illnesses).
We can help folks avoid drug overdoses. One piece of low hanging fruit is to make opioids over the counter — that ways people aren’t _accidently_ overdosing on mislabeled fentanyl. And when they do OD, we can make sure they have safe consumption sites and narcan available (this is no different than a bar, where sometimes an ambulance has to rush away someone with severe alcohol poisoning).
We can help folks fight obesity — calorie counts should be included on everything and farm subsidies should be reallocated to healthier foods and low-calorie alcohol sugars instead of HFCS.
And lastly, COVDI-19 has been a big contributor to increased mortality. Anytime the US wants to get serious about the virus we can.
>and more fuel efficient
more fuel efficient is only of interest if you are talking about how much it costs to run a car. Cars are more fuel efficient now than they were in the 1970s because it costs so much more to run them.
Funny enough of course that increase in prices started in the 1970s.
https://www.titlemax.com/discovery-center/planes-trains-and-...
> I think this is obviously false and hurts the credibility of the rest of this comment.
Technology is known to be deflationary; getting faster and cheaper over time.
This is how some fast food prices have been mostly staying the same; though even here you sometimes see shrinkflation.
It’s unfortunate that there’s so much politics around the inflation numbers, things that are deflationary are deliberately used to reduce the inflation numbers.
If something is too inflationary it either stops being measured or new ways of measuring are introduced that reduces the numbers.
The challenge is when specific areas that are worse off (wages) are lumped together with a general negativity (we’re worse off).
I wish there were better metrics, but at least we have tools like CPI. It’s just so tempting to use these data for the wrong analyses and conclusions.
However, the past generations in my family were able to have one working parent and still provide for the family.
I have a wonderful “tech job” and still need my wife to work fill time so we can raise our two kids and we still can’t purchase a house.
Anecdotally, I don’t understand how we are better off, but you are correct; the tvs are much higher resolution in 2021.
That's true in some ways, but in other ways these technologies make our lives better in the same way Heroin does.
> Compared to the 70s, a new car is faster, safer, more comfortable, and more fuel efficient. Similarly, most houses are bigger and better in America today.
Do you think these things are tied to meaningful improvements to people's overall happiness, mental and physical health, and well being?
Yes. Technology and wealth makes our lives better and makes us happier. Yes.
What you think of this graph? https://www.epi.org/productivity-pay-gap/
Because by my reading, it looks like the average American is not reaping the gains of this country's GDP output by a significant margin.
How many projects apartments from 1970 would you have to combine to assemble a full suite of working appliances and utilities. Now run that same test for the rural shacks and early mobile homes. How many of those people owned cars, a decent set of seasonally appropriate clothing, got their nails done, ate fresh produce out of season, etc. etc. etc?
Now run that comparison for 2021.
We're a fuckton richer. But proportional increases in the amount of our income sapped by shelter, education and medical care have more or less cancelled out all the gains in material wealth.
Completely ridiculous. I don't need internet or smartphones to live and they don't make my life better. I need food, shelter, and some transportation, and the point is: these things have become much more difficult to afford each year since 1970.
At what age are people moving out, having children, buying a home, retirement?
The age for all of this has gone up massively. Because it takes much longer to earn enough money to afford to do these things.
It is not OBVIOUSLY false.
Look at education costs relative to the cost of living. Consider that your only recourse to a decent salary is through higher education, since the middle class union job is dead (and REALLY dead for someone young since all the ones that do exist are held by older people that sold out the younger generation in successive union negotiations).
You really think housing is cheaper or better now? I'm assuming you live in silicon valley. The only thing built is "bigger and better" because that is MORE EXPENSIVE and people have to PAY MORE for it. Nobody builds 'affordable housing' which you are obliquely criticizing people for not choosing. There is no choice for 'affordable housing': all of it that exists is occupied. That's why there is a housing shortage and rental shortage in practically every major urban market.
And then there is health care...
Food has dropped in quality even if one argues it has maintained cost parity.
Jobs are far worse that they used to be. Like food, the number of jobs is cooked to seem the same, but the quality of the job is far worse, which leads me to...
A great deal of consumer cost advantages have been due to globalization/arbitrage of foreign near-slave-labor. The cost of better consumer goods is destruction of the middle class and US manufacturing.
All the major milestones of the happy capitalist worker's lifetime are all very very very much more expensive or worse.
All of these structural degradations to the US are being propped over with financing shenanigans such as low interest rates. The Pandemic is all that on steroids.
All those shenanigans are sensitive to disruption. COVID is pushing our currency manipulation/control to the brink.
If a factory produces 10x as many goods with the same number of workers the work those people are doing has increased in value. But, their unlikely to see a 10x wage increase.
Meanwhile, things provided by the free market have become incredibly less expensive and more powerful: technology, communication, entertainment.
Nothing to do with your rich vs poor class wars.
Yet in 99% of your peers, OECD countries, those regulated domains are generally more regulated, not less. And we're talking about 40 countries or so, many as diverse as the US, big enough to be comparable.
How do these data point for into your narrative?
Healthcare is 2-3-4 times <<more expensive in the US>>.
Education is generally <<free or very cheap outside the US>>.
Housing is expensive outside the US, too, a bit less so.
I feel the problem is not regulation in the US, it's that you half ass it. Americans are all about "rugged individualism" and "small government" when advanced societies are advanced because large groups of people work well together, which is the opposite of individualism. I've been in places where there is an extreme emphasis on individualism and they generally they don't look good (for example Eastern Europe does it due to a huge negative legacy of forced collectivism).
And the quality of state-provided healthcare is significantly worse than in US. Most people with means get private medical insurance skipping the one purchased by their taxes entirely.
Eastern Europe has two huge problem completely overshadowing their advantage from less regulation: a strong culture of corruption instilled by the years of communism and a gigantic brain drain to a west more than happy to lower their own costs (in health care as well) with the best of the cheap, highly educated Eastern workforce.
And countries with comparable stats like waiting times pay less overall.
Don't die on this hill, it's not worth it.
It's the hill I live on, so I will probably die here.
And I also do not enjoy the hard left turn of the recent Western politics. Although I am sure they will realize their mistake eventually and turn back to the principles that brought their prosperity - I am afraid it will be a bumpy ride.
[0]: https://www.numbeo.com/property-investment/rankings_by_count...
[1]: https://www.supermoney.com/inflation-adjusted-home-prices/
The real reason is non-scaling vs scaling, IP like tech and entertainment and internet are incredibly cheap to scale. Manufacturing has also become a lot cheaper and automated.
In contrast, things that are supply constrained (housing) or mostly depend on human labour have become expensive. A nurse spends approximately the same time per patient as 100 years ago, a car requires a fraction of the human labour compared to 100 years ago.
There is a deficit of qualified nurses not only because it takes time and money to train one but also because you are not legally allowed to hire one even if you find it, without the necessary papers and certifications. More regulations!
So even if I agree with you - the human labor cost has increased and things dependent on it have become more expensive, the supply is artificially constrained by regulations as well.
Imagine if it was illegal to hire programmers without a certification from a government approved body. Would we still enjoy this explosion of incredibly cheap software in everything?
A more compact society would simply be less costly to maintain, and you can use public transit to scale transportation.
Housing is only very expensive because of land use policies and we don't build enough of them. Once we have a more liberal land use policies, then maybe labor costs will start to matter.
But Western European countries (which you probably compare to) had an immense, unspoken advantage: an incredible supply of highly educated, unexpensive health care work force - the Eastern Europe.
If you want to truly compare the healthcare of USA with Europe's please include countries like Bulgaria, Ukraine, Serbia, Romania, Moldova and so on. Yes, it's cheap. But you truly get what you pay for.
The other ones are even worse, Moldova's GDP per capita is 1/20th the US one. So probably 30 times more money spent by the US on healthcare.
It's like comparing a maglev train to the original steam locomotive :-)
And health care cost increase exponentially with quality, not linearly. Bleeding edge research and medical advances appear in the USA mostly. And mostly everybody enjoys the fruits.
The US has a very parasitic healthcare system so I wonder how much their expenses are for actual research.
The first one is Swedish and the second is British.
The US is much better at creating visibility for its accomplishments.
My point was very simple. Out of all of the world's developed countries, the USA is the one with the most expensive healthcare, despite less regulations. My point was that regulation by the government does not lead to "incredibly more expensive healthcare", as you have have stated.
From there, comparing the USA to Bulgaria is simply beside the point, the conversation was about regulation leading to "incredibly" higher costs.
Not even sure what exactly you think the proportion of foreign-born medical staff is in Europe. As far as I can find, the maximum is ~30% in the UK, while in Germany is 7%. But either way, to think that this is somehow the reason why Americans pay way more than anyone else for basic stuff like insulin and medical bills is ridiculous in my eyes.
Even if what you say is true for Western Europe, there are other countries (pretty much all) with highly-regulated healthcare and they all pay less than the US. But I'm sure there's some niche reason for why that would never work in the US.
"Peter Schiff vs Warren Buffett; The Middle Class in the 50's, and Now"
I don't even have kids and I recognize what he's talking about. By the time me and my partner are home (7pm) and have prepped, cooked and cleaned up from dinner, there's no time or energy left to do anything productive or thoughtful. People mock millennials for eating out or ordering in too much, but the temptation to just eat at work and then claw back precious time in the evening is very high - i'd do it in a heartbeat if my partner let me.
It's just market forces at work of course. Once couples become DINKs, and bid up the cost of housing, the single income families simply can't compete and become extinct. Median house prices are 10x median income. Banks will lend you <5x income. For most here now (the UK), buying a property on a single income is a mathematical impossibility without first saving for a decade, living with your parents until you're 30, and then taking out a 30 year variable rate mortgage.
A way to un-chauvinistic this point: I'm a male and I'd love it if I could get married to a women and have their income alone support a lifestyle with a house, kids, car, etc and leave me to do house work + cooking. Sprinkle in access to a computer which would let me do some programming and potentially generate extra income and it I'd be extremely happy.
We removed senators right to vote for the right things in private in ~1970. After this things have gotten very bad in the US–policy wise. Polarization. Extreme lobbing. Partisanship. Fiscal policies that only favor the rich.
See this: https://wtfhappenedin1971.com
All of this happened after we changed the rules in Congress where they voted and had committees in private, to out in the open.
- The end of the Bretton Woods monetary system
- The occurrence of peak domestic oil production in the US
- (now) removing the ability of senators to vote privately
...
https://medium.com/k-street/the-average-american-has-no-infl...
Political polarization has been bad for the US it's entire history. It was certainly worse and more violent in the two decades before 1970 than since, though the last few years have been ramping up.
Partisan polarization was low for much of the post-WWII period because the issues of political polarization were unusually misaligned with the axis between the major parties (because of the unresolved partisan realignments around the New Deal and then Civil Rights which didn't finish shaking out until the early 1990s; as the direction of that shakeout started to become clear by the 1970s, partisan polarization started rising, and really took off from the 1990s, but this partisan polarization isn't a special condition, it's a reversion to the historical norm.
Good question. One answer is the government consumes ever more of the GDP. This is going to negatively impact real wages.
More of the share of productivity has gone to the owners and CEOs compared to the workers over the last 40 years. That’s the fact base that we are working from. Your supposed answer fits like a square in a round hole.
You could give all the CEO pay to the workers and it won't make any difference, except you won't have a competent CEO anymore.
Any worker can become an owner by buying stock.
That’s some real “just stop being poor” advice.
It feels like it would be better if the basics were cheaper and the trinkets were more expensive...
Long term interest rates have been going down for decades. This is a long term trend, caused by low GDP growth expectations. The labor force participation rate keeps trending down. Healthcare costs keep trending up. Population is aging. These are fundamental problems for which there is no great solution, and interest rates are low (along the curve) as a consequence. The Fed is ultimately only a minor player in this. They can provide excess liquidity, but only for so long. Ultimately rising inflation forces the Fed to withdraw liquidity and the market will inevitably deflate. Fed policy postponed a market crash by a couple of years so it wouldn't hit at the same time as covid, and that's a good thing.
But who benefits from a steady stock market? Regular people. Pension funds. Who benefits from crashes and wild gyrations? The wealthy. Hedge funds. This makes perfect sense, because a treacherous market is best navigated by the most experienced and wealthiest parties.
You seem to argue the opposite: that a market that has steadily gone up and up and up because of Fed/inflation manipulation has somehow benefited the wealthy elites at the expense of regular people?
Yes, workers get paid too little and much in the world is unfair. But your analysis is mostly conspiratorial silliness. I don't know what you mean by "ridiculous race war", but Black people in the US are 20x poorer (by net worth, on average) compared to whites so a race/color blind analysis of the economy doesn't work.
Your whole argument fails because of that.
What we are facing right now with the "money printing" in all its different forms or manifestations, is nothing less and nothing more than just plain fraud. It's really no different than if you were told the painting you are buying is a renaissance masterwork, when it's just a sophisticated fake. It's a bit more nuanced than that because the ruling clan used to understand that they can't get too greedy, but that seems to have changed now since they have just gotten away with ever more brazen frauds over the decades and have not been held accountable in at least a very long time, if at all really ever fully. It used to be "… one for you, two for me, one for you, three for me", we seem to be up to "one for you, 5 billion for me … wow, look how successful and smart I am".
It's the biggest problem I have with people who make excuses for "taxing the rich", because frankly, they didn't earn it at all when the government is essentially defrauding the lower classes and pumping trillions into the upper classes. Unfortunately the well has been polluted and the only way to fix it would be to rescind all the fraudulently earned "money", e.g., seize all wealth over $5 million, but that won't happen for several reasons, so we will get the tune we paid the piper for by drinking from the poisoned well. Round and round it goes, where it stops nobody knows. History tells us though, likely it will end very poorly for some group of people. Abuse begets abuse, and the ruling clan has been abusing hard again for a very long time.
We reap what we sow.
To take 1950-1970 as an example of "the way things ought to be" is highly unrealistic.
Workers in the US are still making more, much much more in most cases, than their counterparts in other countries.
Ironic typo.
A lot of it is because workers are doing less. They may be working just as hard, or maybe even harder. They are doing tasks that enable more production. But they are doing less. And many fewer people are required to do it.
More people do the last mile of work that can’t be automated, requiring 0 skill, and little thought. Low end jobs still used to require a fair bit of expertise, but are now dead ends.
Performance in many of these jobs is upper bounded at just showing up and doing it. It’s not even a rat race.
tl;dr low skill labor supply outstrips low skill labor demand.
Corporate profits soared while wages flat-lined. Coincidence?
Would a little bit of profit sharing be so terrible?
Piketty frames stuff in terms of the share of growth that goes to labor vs capital-owners, and I can't stop viewing the situation in those terms. My understanding is that recent data shows that in general, companies selling a lot of consumer goods have improved their margins -- they're raising prices faster than their costs are increasing -- meaning effectively we're shifting money from consumers to shareholders. Every crisis is an opportunity to argue for the richest to enrich themselves further.
I generally like Picketty's analysis, but I wonder whether it might be worthwhile to do a similar analysis and include the portion that goes to co-ordination costs. It might be irrelevant in france for cultural reasons but I suspect it's an important piece of the puzzle in the Americas.
So much of the money that was spent during the covid response was shoveled at businesses and capital owners.
I think this is basically wrong in that it's only true for a minority of Americans -- the kind that are overrepresented on this forum. If you're in tech or finance or law, then there are big payoffs to moving to San Francisco or New York, but this actually isn't the case for the typical American. When you compare cost of living it's clear pretty quickly that the median American is still doing just fine in the vast middle of the country.
The median household income in the NYC metro is $83,160 and the typical home costs $571,556. In St. Louis, say, the median household income is $66,417 and the typical home is $222,076. For the average American, the second option is a much better deal. Sure, you make $16k more in NYC, but does anybody believe that the entire cost difference between the two metros is $16k per year? It's not even close. The median American is much better off in St. Louis.
A lot of people reading this are in households that make many times the median household income and they have understandably concluded that their best options are in a few costal cities. But it simply isn't true for the typical American.
There's kind of a dual (seemingly contradictory) error here in that people both under- and over-estimate how wealthy the U.S. is. They overestimate in that they forget that the majority of Americans are living on much less than the average software engineer, but they underestimate in that they forget that our poorest states are still much wealthier than than the average European country.
See here: https://www.aei.org/carpe-diem/us-gdp-per-capita-by-state-vs...
I wasn’t around in the 1970s, so can someone explain to me how great it was with some examples that would make me want to go and live in the 1970s?
Of course I don’t expect to hear much because as far as I can tell, 2020s USA is better than 1970s USA in every way I can think of.
Hoping someone comes along with a more evidence based continuation of this point.
Regarding your question there is a simple explenation. YES we are much much productive then before. BUT wages are decided by markets. No one is paying you your "fair" share if it is possible to hire someone cheaper. Its like a commodity in the end. Good devs or spezialized doctors get a very very good sallary, so it just depends on your "market value".
(non-farm) Labor productivity declined by 5.2% year over year:
https://www.bls.gov/news.release/prod2.t02.htm
If you break these numbers down, you see that total production increased by 1.2%, but it required 7.4% more labor to produce that extra 1.2%. Compensation went up around 3% but of course in real terms it declined -- it pretty much has to decline if you need more labor to produce the same amount of stuff.
Whether or not this is a trend or some weird pandemic related thing will be seen over time.
I would argue that just based on the technological progress total average productivity per person should go up.
In certain situations, when an economy is mismanaged, it will go down for prolonged periods of time, but again one year changes are not a significant trend. But this article about worker pay and inflation is not about long term trends, but recent (since 2020) trends.
What we need to do is decouple health insurance from employment.
The easiest way to do that would be with a national single payer health care system, which would also help lower total healthcare spending. But both mainstream political parties are dead set against doing such a thing.
Whether or not employees are actually worth 6% more they should not have a problem finding a new job in this market (that will pay 6% more).
IT and professional services was 10.5%+ but again only for job switchers.
A labor market with high liquidity leaves most people better off.
wing-_-nuts said 'with inflation rising at 6%, will the company reconsider their 'standard' 2% raise?'
It wouldn't make any sense to say that if the 2% raise was real.
I mean, aren't people resigning in droves these days?
Though to try and prevent misunderstandings - I do think inflation is bad for people who are paid wages. Market forces aren't perfect and "market price" is really a band of prices. Inflation pushes all workers to the low end of the band and means if anyone doesn't feel like negotiating they will be pushed in to a bad deal by default.
Just like millennials love to claim boomers had it easy, it was a small slice of the pie that benefited.
Inflation doesn't change the actual power balance between different actors, it does make the situation more complex and harder to keep up with. It doesn't create real wealth and it is not responsible for a wealth transfer to wage earners. The idea just lacks a mechanism - for the wealth to come from employers or businesses they have to be ignorant, altruistic and disinterested in money. That seems unlikely. Ditto most other actors. Changing value of money favours people who can continuously adjust to it which isn't a typical wage earner.
If a generation gets something for free, they got it from somewhere else. Who lost out here? Why did it need to be inflation to make that happen? If they didn't get it for free, it is unclear why inflation would be necessary in the story instead of incidental.
You should unionize for many reasons but I wouldn't trust it as an efficient tool for pay negotiations.
[1]: because no uninon ever manages to not try to meddle in international politics. Gandalf in LOTR had it right: he did not want power because he knew he would be tempted to try to do a lot of good things.
The way it stands the downvotes are deserved.
I'm personally not unionized but this is not something I would accuse the union of ;-)
Edit: Sorry I might have misread your comment. I should say that our average increase was also above 2% several of those years.
[1] https://en.wikipedia.org/wiki/Wassenaar_Agreement [2] https://www.volkskrant.nl/nieuws-achtergrond/koopkrachtrepar... [3] I recently verified it for my own collective bargaining agreement, and on average, the raises were about 1% point higher than the inflation
Unfortunately unions protect the incompetent and punish the successful (by refusing them the ability to negotiate). It's most pronounced in the heavy unionized industries like teaching and auto manufacturing.
There will always be developers who produce the results of 10, 100 or 500 developers single-handedly. Unions kneecap them, like they kneecap outstanding teachers by paying them the same as the teachers phoning it in every day.
Note that this doesn't always even involve taking it.
Go get a job offer that pays better and bring it to your boss. If they want to match it, great. If they don't, bye.
If someone is unhappy enough to start job hunting rather than talking to me then it's a clear sign that they'll leave soon regardless of any pay rise. Psychologically, every pay increase makes someone happy for a short time, and then they get used to it and they start to wonder if they should have asked for more, or they focus on other reasons why they don't like the role they're in and wonder if the other one would have been more fulfilling. If you match an offer, or even beat it, the person is likely to have left in a year anyway.
The irony is that the main reason people get paid more when they change job is because they move up at the same time.
So giving the same purchasing power for more responsibility would probably not look like a good deal for most (unless responsibility is your thing which is the case for some people).
It's all game theory, in a minefield of unintended consequences. I take the opposite approach: an unspoken but clear attitude of "you know you won't be able to buy me when I excuse myself with a better offer, so better ask yourself now than later how much you actually want to pay me". And no, that certainly does not make me fabously rich (but there actually was a time when it worked much less bad than I would expect, quite amusing in hindsight)
If someone has a chance to take another step up in their career that's a good thing. If I offer them more money to stay at the same level they'd be silly to accept that.
What makes you think people only go job hunting when they're unhappy? I consider it a moral obligation to seek out the best pay (after staying at a job long enough to justify my original hire and for the sake of my own resume) in order to do my small part to increase worker wages.
If they fail, they know I cared enough to assist and trust me and are happy for their job. If they succeed they get a raise, but are more likely to stay and work harder knowing they can trust me and can collaborate.
I don’t see the downside in engaging in this manner.
In other words, unless you can contradict me with a straight face, you're basically just saying you underpay as long as you can get away with it and nothing can stop or change that.
Not all workers are equivalent, and not all roles that seem the same even in the same team, actually are. Let’s say we have a team of 10 people, each with slightly different experience and skills. One of them finds another job with higher pay and asks for it to be matched. What do you do?
It’s quite possible this other role actually matches their skills better than the one with you does. Maybe they are actually worth more to this other company than they are to you. Maybe they had other reasons for looking for a job aside from pay, maybe they’re tired of the job or want a fresh challenge. Maybe it’s a combination of all sorts of factors. Pay is only one.
If you do increase their salary, what about the rest of the team, do you pay them more too? Do they all have the attributes this other company valued in the person they made the offer to? Would they have all got the same offer? Probably not, but now you’ve upped the going rate for a member of your team. They will want the same.
It’s just a really messy situation to get into. If staff retention and recruitment is a problem or you don’t want it to become a problem then sure, of course you should make sure your compensation rates are fair. Of course under paying your team will cause problems. But one person getting one job offer doesn’t necessarily mean anything, except for them.
It's not like everyone performs at the same level or gets the same pay in almost any team I've seen.
If someone gets a job offer, you should consider it a new data point. Some teams don't aim to retain top talent and if that's the case absolutely encourage them to move on. But if you want a high-performing team, you need to pay top of market and a job offer is new signal about the market price.
> Probably not, but now you’ve upped the going rate for a member of your team. They will want the same.
I have never once wanted to be paid the same as everyone on my team. Some people are more experienced than me and should be paid more. Others are less skilled and should be paid less.
It doesn’t matter. Even if they are different, one person getting a raise changes the relative dynamic. Maybe I was being paid more than this team member and now we’re the same, and maybe I still think I’m worth more. It elevates the basis of comparison.
Also, to expand on my post, it creates the impression in the team that the way to get a raise is to get a competing offer. It says that person was being under paid. Maybe that means you are too? It’s just bad all round.
No one, and I do mean no one, is irreplaceable. Maybe you’ll have to throw away an entire IT system because you’ve lost the know how to keep the business case for the system a net positive, but that means a lot less to an organisation (especially enterprise) that we tend to fool ourselves into believing myself included.
When a key contributor asks for a 20% raise (or say $50,000 more per year) and them leaving put millions of dollars of revenue at risk, or more importantly, reflects poorly on a manager and threatens their advancement (why can’t you keep your team happy?) then the math is actually quite simple.
But in a highly siloed and compartmentalized organization where blame for bad decisions never filters down to the ones making them I could see your point.
Every team should fight against this. Writing simple, understandable, documented code that doesn't need some key person to maintain it is a very good thing. For a start, failing to do that locks people in to their job. Not being able to move on, and up, is a very bad thing. Secondly, people leave for reasons other than money. What if someone's husband gets a cool job in another state and they move for that? No amount of money would keep them, so you still lose those millions. Thirdly, there's the bus factor - what if that person is run over by a bus? How do you keep going?
Paying someone more and more to keep them is only patching the underlying problem that your team isn't resilient enough to catastrophic change. Fix that problem.
My experience is on teams of 2-3 working towards a product launch that has to happen in 6 months and sure we can always replace someone if they die. The cost of that if not in revenue, but team efficiency, sacrifice of other work, is way more than a few tens of thousands per year.
And of course, everyone is replaceable. But replacing them may cost more than just paying them more, even if it keeps them around for another 6 months.
If you’re a good manager you’ll want to keep your employees for 5-7 years. This is because you want to help your employees develop their talents and grow their career, and when you do that, they’ll eventually outgrow the role you hired them to do and how far it was possibly to extend it to accommodate their growth. By that point, you kind of want your employees to move on. Maybe to a new position within your own organisation or to a different place. It’s not because you don’t like them or don’t want them to stay, but it’s because good employees tend to outgrow you. A select few people can stay in the same functions their entire lives and never lose enjoyment or motivation, but most of us aren’t like that and you have to keep that in mind when it comes to “pay me more, or I’m leaving” negotiating.
More than that though, you have to see how relying too much on individual employees is actually what is the management mistake in these type of situations. The issue isn’t “why couldn’t you keep x”, it’s “why did you let x become irreplaceable” because any good manager should know better.
Maybe the public sector in Denmark is different than other places, maybe not. I don’t think that it is. What typically happens when you have IT systems that rely too much on an employee is that they leave you and then you end up paying them a lot more money to consult for 6 months until someone else has redesigned the systems to no longer be too dependent on a single person and your former employee finally gets to really move on.
You are comparing throwing away an entire IT system to increasing the salary of _one_ employee.
If you have systems (and that is any function, also cutting onions in the kitchen) that relies so heavily on one employee that you can not continue to operate them without that person then you have a serious issue.
Because you don’t retain employees, and your goal isn’t to keep them forever either. Even if they are happy and stay for 40 years they will eventually retire and then the system tend to break down anyway, and that’s with planned departure. What if your vital employee gets run over by a truck on the way to work?
So from an organisational perspective, it’s not an entire IT system vs one employee. It’s removing a flawed and dangerous system from your organisation.
Some people will argue that employees who design such systems aren’t worth keeping to begin with. I would agree, if the world was perfect, but it’s not.
Long time ago when I was employed I liked my job but felt that I am being paid less than what I could get. So I went searching and after a while got a really nice offer. With that offer I came to the company owner and ask him to give me a reason why should not I take the offer. He did give me a reason - matched the offer and put bonus on top. The end result - I stayed. Well until I went on my own and never looked back.
A new company is willing to risk it on you, while paying more than your current job where you have experience. No surprise they leave in a year anyway.
This is the crux of the problem - people assume that anyone going to their boss asking for a raise is underpaid. That isn't always true.
When someone goes and finds a new role on more money it's almost always at a higher level. People move upwards when they move on. Matching an offer usually means paying someone the salary for the higher level role to do the work of the lower level role.
If someone wants to move up a level to earn more I've always been happy to talk to them about that. That's not what we're talking about here though.
so you mean if a recruiter contacts your workers and says we can offer you X amount and they check it out they should have talked to you beforehand?
If you would be a supplier you stance would translate to, I never make a new offer if a customer comes with a better offer from a competitor. I suspect one would loose a lot of customers this way.
I have no opinion on if the negotiating tactic is good or not, only that the comparison of goods and people isn't quite right IMO.
Edit: I also find the argument that employment is not a an economic transaction a really weird argument. Employers don't give raises just so that the employee feels better for example.
The OP talked about people, then your reply was about goods. Unless "contract with a supplier" was about humans as goods, that term obviously means purchasing stuff, not purchasing humans. Who uses "purchasing" when it's about humans/employees?
Goods don't have a brain and no state of mind which was at the center of the OP's comment.
Okay, back to your original reply then:
> If you are responsible for purchasing, will you ask competitors for quotes?
The OP talked about the people themselves. If we follow your line then you don't talk about the employee at all any more. You are talking about something else than the OP.
What if salary is the only thing they are unhappy about?
https://allthingsd.com/20110108/twitter-courts-googles-sunda...
I’ve tried your approach and it’s usually a token amount or “sorry there isn’t a budget”. When I have an another offer then suddenly they find “flexibility”. But that said, I don’t even ask for more if I’m so unhappy I see myself leaving anyways.
I understand mot everybody can move up the ladder or get more money, but if as I line manager you can’t provide incentives or growth opportunities I would look at you first. If you don’t know the aspirations of your people and you match this with the strategy and goal of the company, are really made for your role? Every manager should be more like - I know you can leave anytime lets find the best solution for all…
So, you give an inflation matching pay adjustment automatically?
I've gone back to exactly the same job as I started 20 years ago. Pay has doubled, house prices have increased 3-4 times in my small ex-industrial, high-crime, UK city.
The first thing my father told me when I started working was "never accept a counter offer. Don't put in your notice unless you're ready to leave - because even if they give you a counter-offer, they'll start looking for your replacement once they know you're looking."
He announced he was leaving our company for Amazon (which paid substantially more), and we even had a whole Friday goodbye party with cake and balloons. The next Monday we came into the office, surprised to see him still working for us. It turns out that over the weekend he somehow convinced management to match and exceed Amazon's offer.
His "trick" for getting a raise is that our whole dev-ops setup was unworkable without him. Management hadn't come up with contingencies for his inevitable departure, and thus he held all the leverage in salary negotiations.
They expressed that they wanted me to stay but at the end of the day it was crocodile tears.
It is true, but i am not sure it is a good long term strategy, i suspect that too much job hopping doesn't look good on the resume.
Also changing jobs becomes harder with age, i am fifty one years old, and last time around, when forced to look for a new job, I found that it was quite a bit of a challenge (being said that, i need to feed my family, so that i really need a raise :-( )
One of the best things Covid has done for my salary is make remote work far more common so I could get a job outside of the local market without having to move.
- Available products in the world,
- Number of people who can afford them.
With Covid, we didn’t produce for 2 months in 2020 and we’ve produced slower in 2021. And all governments distributed free money. So, in theory there is clearly not enough goods produced for everyone in the world. Prices should rise dynamically until 10% fewer people can afford them than in 2019.
Where are the people who can’t afford buying things? There should be a diminution of 10% global consumption, where is it? Where are the people whose company won’t be able to match inflation, even if they unionize?
The inflated currency doesn’t matter, who’s the people who are depriving themselves while I’ve made a fortune and bought a house? I see we’re a whole lot who won the jackpot with Covid, who are the losers and why aren’t they already revolting?
The already-marginalized? "The Trussell Trust reported a 33 per cent increase in the number of three-day emergency food parcels in 2020-21 compared to 2019-20,"
https://commonslibrary.parliament.uk/research-briefings/cbp-...
> There should be a diminution of 10% global consumption, where is it?
Hospitality and travel.
A couple years ago my previous company cut the standard yearly raise from 3% to 2%. When inflation went crazy during the pandemic I started casually dropping the quoted line into every conversation with coworkers I could. I even threw out some feelers around organizing but I was always laughed off by someone or other.
It is mostly the market (e.g. the other company pay high, so we do too). The living cost doesn't really matter.
I appreciate the honesty though.
Most companies are still requiring onsite. Even apple (one of the most innovative companies) still wants employees onsite.
Not all companies are run by idiots.
What did you tell them?
Because that is literally HR’s job description?
(If you’re looking for a group similar to an HR department, but flipped so that their job description is “defend the workers in front of the company”, that’s a union)
The 'No' alone would be enough, but the 'Honestly?' would me want to look for other jobs right away.
>
> The 'No' alone would be enough, but the 'Honestly?' would me want to look for other jobs right away.
Can you explain why one is worse than the other?
(I'm not being facetious, I'd really rather like to know).
I can see how such an attitude would be offputting, but I do not believe that is the correct interpretation of the HR spokesperson's meaning.
Pro-tip, if you have yearly performance/raise/bonus discussions, let your manager tell you all of the nice things to justify why they are giving you a raise. Dig into it, be super grateful and receptive. Then ask "oh of course this is in addition to an inflation compensation, right?"
If not, it's appropriate to be genuinely confused about why you're actually not getting a raise at all given his/her stated reasons why you are deserving of one.
Tell HR and the C-levels that the employees are making a big investment of themselves at the company. Shape the dialog such that the leadership has to recognize the employees as investors, not cogs.
At every all-hands since late 2020, the topic of attrition and comp comes up. Every time, the response was that they're keeping an eye on local market conditions and attrition, and if it looks like we're falling behind we'll make adjustments.
Anyways, I left for big tech and got a 70% raise (despite a downlevel)
It sucks that every job has a "lifespan" of only 2-3 years before it would be foolish not to go get another job for a massive pay bump. As much as I love my current employer I'll probably leave sometime in 22"
What is needed? I mean, if she's a straight shooter and your salaries are competitive locally, does that mean you'll have to up up and move elsewhere? That costs time and money, and to be honest, wages are low nation-wide.
This does highlight the fact that wages are kept low almost by a concerted effort among employers. They aren't going to change out of the goodness of their hearts. Change has to come from the government (don't hold your breath), or from workers acting collectively.
Also, I assume employees would be pretty upset (I would be) if they got -2% if there is deflation happening, so seems a bit of a double standard there.
Long way of saying I think tying increase to inflation is kinda silly.
People feel completely disenfranchised. You keep hanging housing over their head but just out of reach like some baby toy, then inflation spikes everything else. What's the point of working even?
I don't know the solution, but I don't have a good feeling about the next 10 years.
For example, with the way supply chains are right now, how much leverage do transportation/logistics workers have to force a change?
https://en.wikipedia.org/wiki/Tang_ping https://fred.stlouisfed.org/graph/?g=JXII
You are right, people talk about guns as protection against state tyrany, but they forget that the reason it works as protection against the state is because the person bringing violence against the state is willing to become a martyr.
The more the state pays in blood, the more it looses it legitimacy.
Tyranny is invited. It happens when you willingly open the door to someone who says they are going to solve all your problems, yet they never do.
They will always blame someone else when the problems aren’t solved, and you will believe them because you believed them once before. You won’t even recognize this as tyranny because you will be so outraged at the people the tyrant tells you are to blame for your problems. Slowly these people disappear, yet the problems remain.
Until one day the tyrant blames you for the problems of the world. And suddenly you recognize the tyranny for what it is. You reach for your gun but it does you no good. At this point the tyrant has turned everyone against you, just as he had turned you against others.
The process continues until there’s no one left to blame, and the tyrant at this point usually ends up hanging from a tree, or hiding in a hole in the ground.
But at no point in this process is a gun useful for preventing tyranny, unless you’re willing to actually be a martyr and kill the tyrant before anyone recognizes him as such. You’ll be labeled a murderer and sentenced to life in prison, but you will have prevented tyranny.
They do, but you can ignore it -- it's mostly lies and bluster. If they insist, ask them the last time they participated in (or even saw) an uprising due to government theft by civil asset forfeiture.
There are many points to be made, but one that tends to go less appreciated is that in the period leading up to the dramatic revolutionary events there isn't a constant increase in tension. There are flare ups of course, but they punctuate years of relative peace. Just because tensions die down for a bit does not mean things are getting fixed. Quite the opposite, it lulls people into complacency. That is, until the systemic deficiencies paired with personalities unable to address them collide and everything falls apart.
1. https://thehistoryofrome.typepad.com/revolutions_podcast/
https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...
The revolution will be more Trump than Bernie. Like in the early 1900, where more revolutions where fascist than communist.
You mention this in a discussion about Bernie Sanders? Probably the politician with the most single-minded focus on class politics in the country
Bernie isn't elite and not close to any power circle.
>annual income of 1,100,000 U.S. dollars for a household of 2 is equivalent to $1,309/day per person in 2011 in purchasing power parity dollars, putting you in the high income group worldwide, along with 39.8% of people in advanced economies.
*2 since he has a wife.
And he doesn't have to pay much for insurance as per this [3](https://www.cnbc.com/2017/07/25/heres-how-much-members-of-co...)
He is a part of the "elite" class as per his income. And being a senator he does have a lot of influence over policy.
I don't hate Bernie but seeing the discourse regarding him, that often deifies him feels disingenuous to me.
Certainly his position as US Senator and accompanying benefits is significant, but I was just commenting that being a “multi millionaire” is not indicative of much sway assuming multi millionaire also means having a few million in total net worth at retirement age.
Anyway, my point is, I would not qualify him as “elite” in the sense of being able to affect federal policy just by his regular income / net worth if he was not already a US senator. He would get outbid by many others with deeper pockets vying for political influence.
And to be perfectly honest, the fall of communism, kind of coincides with when the balance of rich vs the rest started to go off rails.
Communism is dead, but that doesn't mean something else cant come and replace it (and probably be just as bad)
Bernie‘s ideas would be called leftist here, but not extremely so.
That's simply not true.
> Bernie‘s ideas would be called leftist here
Where is "here"? How is "financial transaction tax" a mainstream idea in europe?
It don't mean it would bypass election in all cases, but I'd expect a completely different mechanism interfering with who gets to power, instead of the usual "let's min-max campaigns based on declared party allegiance like we did for decades now"
Workers find solidarity, meaning and community among peers and realize that we have real power and can have a say in our lives.
I expect this to grow and I hope it creates a counterbalance to centralized power structures that are quite frankly often severely detached from reality.
People have food, shelter, entertainment.
Yeah this is the reality disconnect, if you call modern work slaving away you're probably not the kind of person that's going to join a violent revolt, it's easy to write that shit on forums.
If you call "Amazon workers not being allowed to leave or shelter when there is a tornado warning" not slaving away i dont know what is...
What about all those "Gig Economy" Workers that get paid the bare minimum without benefits?
You might not see it from your cozy office because this development hasn't impacted you yet ... but it will sooner or later.
It's not a light switch, but we can try paving the roads at the bare minimum so that the societal wagon train can transition.
I do what I can, and you might do as well, but there needs a fundamental ideological shift in how we perceive those cornerstone workers.
It was represented by Donald Trump, the rise of the right in Europe and the alignment of Russia and China for short term push back on the west.
DT would never have been elected if _any_ of the architects of the GFC had gone to jail. Imho that was Obama’s biggest mistake. Bailouts could be justifiable and understood by the population, no one going to jail was a betrayal.
It caused a tipping point in the erosion of trust in the established political class and in the American democracy.
The vitriol directed against Hilary was a symptom of that distrust
People are sick of status quo. That's why more and more are willing to try anything that will shake things up.
Yup, and the worse part? Nothing changed. Trump didn't didn't do a single fucking thing of material value to ameliorate the positions of those who voted for him, or the middle class for that matter. And yet he's almost sure to win again in 2024.
I think in an astonishingly short amount of time, people in the West forgot what revolution is.
Wait, what? He's running again?
I sincerely hope this comment ages more poorly than any comment ever made.
As some one who lives in India, where inflation is perennially high. I can assure you revolution is not coming, in fact not even a protest march.
Revolutions needs a lot of hunger and suffering, its not things like milk going from being $9 to $12 a unit.
The common man delays things like fighting for almost as long as they can, its only when things just go too far do things like revolution happen.
USA is not even remotely close to any such situation.
Based on hundreds of conversations with my red state friends, attitudes are very different. You may be right, but the comparison is missing many key details.
That is why they have elections, and one way or other democracy fixes most of these problems. Even if the fix is not perfect, or entirely acceptable to everyone.
Revolutions are just totally a different thing altogether and you need way more than milk and egg prices going up, or your favorite politician not getting elected to happen.
With H1B it's not much better in the US, lets say your job is taking advantage of you, working you 80 hour weeks, one day you decide that you want to go to your daughters big soccer game and they fire you for it. Find a new job in 30 days (?) or move out of the country. Children in the workhouses during industrial revolution had more mobility. Absolutely bonkers. Clearly designed to be explotative.
My Indian peers have been as good as my western ones on average. I understand the motivations, but you guys really don't have to put up with this. If anyone should revolt it's them.
6 Jan 2021.
The violent revolution will always need a leader. In a democracy, that leader will establish some level of political success. These statements derive directly from the definitions.
So what we need to be on the lookout for is a political leader who normalizes mobs and violence, and quasi-political groups/associations which further encourage it.
Jan 6 2021 Proud Boys QAnon
If you forgive the Goodwin, the example is developments originating in Germany prior to WWII.
See for example Kristallnacht, Nov 1938, Vienna, Austria, and the "spontaneous" mobs responsible for large amounts of the violence
The revolution is here in the form of workplace violence. Big employers are actually afraid to comment for fear of looking biased against the GOP
You are aware there was a violent disruption to the peaceful transfer of power last year, right? Since then, predicated on lies, partisans have changed the system to give political parties full control of election results; and the January 6th Committee has essentially uncovered and extensive coup plot that spans the White House, DOJ, and DoD.
We are so far outside of the bounds of the system as we know it that it’s scary people don’t recognize it yet.
EDIT: I'm going to expand upon this because of the dead comment to me, which calls Jan 6 a "riot". It's clear that there is an effort afoot to minimize the events of Jan 6. This needs to end asap because of what the Jan 6 Committee is uncovering.
Jan 6 was not a riot, it was the last stage of a coup plot that started at least the day of the election, before the final results had even been tallied. It's detailed most clearly in the Eastman Memo, authored by John Eastman [0]. The coup plot spanned the White House, Department of Defense, Department of Justice, state legislatures, various members of Congress and the Senate, various lawyers, and of course various paramilitary groups.
The plan was:
1) Pence must declare Arizona invalid when counting certificates of the vote. Specifically Arizona because of the closest states, it comes first alphabetically, and so is counted the soonest.
2) Democrats object, so the matter is taken to the House
3) Voting is done by State Delegation according to the Constitution. Republicans control a majority of delegations, so they would vote in Trump, thus ending democracy in America.
The problem with this plan was that there was no reason to reject any certificate. There was no fraud on the scale Trump claimed. So they tried to litigate, but that failed because they couldn't prove their allegations. Then they tried to strong-arm state election officials by threatening them with jailtime if they didn't manufacture fraudulent votes. That failed as well. They also tried to convince friendly Republican state legislatures to send an alternate slate of electors. That failed as well. They even went so far as to put pressure on state elections boards and county elections officials. This came in the form of threats and intimidation. Trump put pressure on AG Bill Barr to declare the results suspicious but Barr did the opposite, claimed there was no proof of fraud, and he quit because he was smart enough to realize what was going on.
All of this failed because people were just doing their job of running elections in an apolitical matter.
After those efforts, Pence was still wavering on whether to declare Arizona invalid. He needed more pretext so Trump leaned on the Justice department. No one there would open the demanded pretextual investigation except Jeffrey Clark , who was several rungs down the order of succession for acting AG after Barr left. Trump wanted to make him acting AG to open the investigation, but essentially every senior member of the DOJ threatened to quit if he did that, thus ruining the pretext of the investigation, so that failed.
So how do you execute the Eastman memo without Pence? Disrupt the proceedings. The Jan 6. counting of electoral votes is the last stop in the Presidential selection process. If you delay that, you're in extraconstitutional territory. Think of it like a buffer overflow. You're in undefined space where the rules are made by those in power. And guess who had power at the time?
Thus the plan became to hold the Capitol as long as possible in the event that Pence failed to do what Trump wanted. The plan was to generate a great crowd at the ellipse, whip them to a frenzy, point them at the capitol, and if Pence certified Arizona, to then call him out on twitter. Within the crowd they threaded several paramilitary groups including the Prod Boys, Oath Keepers, and 3%ers. While the vast majority of people were not there with any specific goal, there were groups there with the premeditated intent of breaching and occupying the Capitol. But to penetrate all of the security, they needed a mob. You can see these paramilitary groups slithering through the riot crowd like a snake through water in many of the videos from that day. They move in formation and came prepared with uniforms and equipment. Their goal was not to kill anyone, but it was to occupy the capitol for as long as possible. That's why they didn't come with an arsenal, because they knew as soon as the guns come out on one side, they come out on the other side.
To hold the Capitol for as long as possible, they would have to delay the National Guard from showing up. Thus, right after the election when Sec. Esper refused to call the election fraudulent, he was fired and replaced (essentially) with a Trump loyalist Kash Patel. That's why you keep hearing the phrase 187 minutes from the Jan 6 Committee. Because for 3 hours almost, Kash Patel did nothing as far as sending the National Guard, and he did nothing because he was ordered to do nothing (or as it may be more likely, wasn't ordered to do anything, despite urgent need, a dereliction of duty).
Why? What were they trying to do during this time. Well:
1) they were seeing how bad it was going to get. The worse it gets, the better a justification for extraordinary uses of power.
2) They were continuing to lean on state legislatures during this time to send alternate slates of electors. Giuliani and Sen. Mo Brooks were texting at the time, with Rudy telling him to stall as long as possible.
3) They were waiting for Pence to evacuate the building, but he refused.
Ultimately this part of the plan failed because of sheer luck. If any hostages were taken, it probably would have worked. This is why many want Officer Goodman as Time person of the year, because he singlehandedly goaded the mob away from the Senate chambers where he knew many members were hiding.
--
Now take a step back. What have I just described? I've detailed the efforts of a sitting President to use his powers as President to fraudulently remain in power despite an opponent being duly elected under the system in place. That's a literal autocoup. That's not a mere riot. That's how democracies die. If that plan had worked, that's the end of Constitutional order in America.
So how does this plan work in the future? Well:
1) make voting harder. Georgia flipped blue this year because there was surge of minority support in a few key counties by just enough votes. Make voting harder in just those counties, and next time maybe it won't flip by just enough votes. These efforts have been passed into law.
2) Spread FUD about voting. This justifies unbounded skepticism of any election result, no matter how above board. This has been going on for a year and now a large portion of our country believe there was fraud in the 2020 election.
3) Take partisan control of state elections. A lot of the above could have been avoided if Georgia had just "found" missing votes like Trump had asked in the first place. Or if Barr had concluded there was basis for an investigation. Or if state legislatures had just "decided" to send electors they preferred as opposed to ones the voters preferred. For example, Fulton County, which saw no fraud and which has been under non-partisan control forever, is now under partisan Republican control by people who are very sure there was fraud in the 2020 election, even though they can't identify any in Fulton County. But they are there to make sure there is never any fraud again. Which we all need to take to mean that they are there to make sure that a Democrat never wins Georgia again in a close decision. There's no other way to interpret this effort.
Now you can call any results fraudulent, send any electors you want to the counting of the certificates, and leave it up to the Supreme Court to decide. Fingers crossed!
But in the end there is actual physical evidence in front of us. We all have a choice to accept it, or to sweep it under the rug. To deny what it is telling us. To equivocate and prevaricate. To whatabout or to even outright lie to ourselves.
But the actual physical evidence is pointing to a large autocratic force in our government that intends to take away your vote, in favor of Russian-style one-party rule. It already tried once, and it continues unabated today.
Say what you want about the America electoral system, and by God there's a lot to say about it, but at the end of the day there was a transfer of power last year because the old government lost the election fair and square. Elections do matter. Voting does matter. So if you appreciate your right to vote, don't look away. Go on your camping trip, but when you get back, take a long hard look at the evidence presented by the Jan 6th Committee.
I keep telling people something has to give soon. The pressures at the fault line are rising.
https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...
"in the long run, it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."
Worker pay not keeping up with inflation is not merely an effect of inflation. It is the policy goal.
Spoiler: it's not
What is all that employment for if people can't pay their bills from it?
Like for example with the Babysitter's coop. His analysis IS correct, but his remedy is presented as the absolute solution while being oblivious to the fact that the monetary system is based on a total fiction -- that hours are fungible, (e.g. one hour on christmas is equivalent to one hour on September 19, or even that on hour at midnight on a boring day is equilvalent to one hour at 7pm on a boring day). In general, all monetary and social systems are based on fictions, and they will eventually leak their bad abstractions. But I am not sure that Krugman would accept that iron statement.
Relatedly, do you have on Taleb? Given that Taleb and Krugman seem to have beef.
The rich: https://www.cnbc.com/2021/09/17/fed-officials-owned-securiti...
- Powell held between $1.25 million and $2.5 million of municipal bonds. They were just a small portion of his total reported assets. While the bonds were purchased before 2019, they were held while the Fed last year bought more than $5 billion in munis, including one from the state of Illinois purchased by his family trust in 2016.
- Boston Fed President Eric Rosengren held between $151,000 and $800,000 worth of real estate investment trusts that owned mortgage-backed securities. He made as many as 37 separate trades in the four REITS while the Fed purchased almost $700 billion in MBS.
- Richmond Fed President Thomas Barkin held $1.35 million to $3 million in individual corporate bonds purchased before 2020. They include bonds of Pepsi, Home Depot and Eli Lilly. The Fed last year opened a corporate bond-buying facility and purchased $46.5 billion of corporate bonds.
The first thing in the article is a graph where 7 our of the 11 years shown have positive real wage growth.
If worker pay never kept up with inflation, the country would be among the world’s poorest.
https://apps.urban.org/features/wealth-inequality-charts/
The "distribution of family income" chart has been inflation adjusted. Note that for the bottom 10th and 50th percentiles, income has flatlined.
The 90th percentile income earners have seen their wages nearly double, after inflation adjustment.
> If worker pay never kept up with inflation, the country would be among the world’s poorest.
That is flat wrong. Even if you were still making 23$ an hour as you did in the 70's:
https://www.weforum.org/agenda/2019/04/50-years-of-us-wages-... https://www.factcheck.org/2019/06/are-wages-rising-or-flat/
...you'd still be among the top 20% of earners across the earth. Let's take another step down to simple minimum wage. over 7$/hr in the US puts you at... https://en.wikipedia.org/wiki/List_of_countries_by_minimum_w... - in the top 20, which doesn't even include countries without a minimum wage.
Your statement about "among the world's poorest" requires revision.
I can't say his situation is entirely enviable, and I would not suggest using that statistic to tell him that he ought to be happy with his lot in life.
Except in 10 of the last 12 years, as you can clearly see in the same chart
Numbers are bad - "See everyone, things are fucked. I told you so." (which is what this post is about)
Numbers are good - "Meh, I never trust the underlying data anyways. It is all meaningless."
IMO, the problem isn't the CPI. The market is just fundamentally distorted because the government pumps money into real estate into subsidized loans.
Argument: It sort of is keeping up with the real thing (what you have to spend because we'll just take cpi) if you squint at a particular period? Actually it isn't, it's still being systematically underestimated.
CPI is a crap measure of what people actually face in increase of what they have to spend. What you can actually buy, the purchasing power of wages has not been going up. People aren't being fooled into be angry and bitter. Talk to them. Listen to what they say about their constraints in life. Ideally find some people you like for whom you can feel empathy with their situation.
I don't know about the exact methodology, but the concept makes sense to me. "Everyone" is buying food "everyday", so it's sensible to have, say, the price of bread included directly. On the other hand, "no one" is buying houses "everyday"; what people are buying everyday is housing, i.e. how much do you spend to have a roof over your head. This is correlated to house prices, but not that strongly. If you bought your house 30 years ago and the mortgage is paid, it doesn't matter whether houses next to you are suddenly worth 50% more, you're still going to pay the same for housing (except maybe due to taxes). If you're renting, it is going to track house prices, but not perfectly. Apparently, in the SF area, the average rent has actually slightly decreased since 2019, while the average house price has increased.
All of this means that while the average house price might have increased by x%, the average person (as in, if you aggregate those already owning a house, those renting, those buying houses now, ...) is not spending x% more on housing, so it makes sense to use a metric that follows the latter and not the former. Yes, if you're looking at buying a house, it means CPI is not very accurate for you, but then a single number is never going to perfectly fit everyone.
Zoom out a bit and you get something slightly more useful, which does support your argument, too: wages seem, in general, to keep up with inflation – though with lot of variation. https://si.wsj.net/public/resources/images/BN-MA272_wages4_G...
I am not an economist, and I'd love to be proven wrong. I just don't see how this ends in a good way for the economy.
Inflation is, among other things, a problem of the market having too low a demand for money compared to the supply. One obvious way to fix that is by taxing money out of existence faster, decreasing the supply and thus increasing its value assuming demand stays fixed. (And there's reason to think it will; demand for money is a relatively unflexible parameter.)
But of course, central banks do not control taxation, so there's not much they can do.
Yeah, if you’re interested in this stuff, you should do some research. The Fed’s options aren’t 0% rates vs 15% rates. It’s going to raise rates .25% at a time. .25% is not much of a difference. It’ll move slowly and act cautiously.
The Fed, and other central banks have dealt with inflation many times before. And very effectively at that. Stocks could fall, but the stock market is not the economy, and the Fed has no mandate to prop up stocks.
Not true in the least anymore - retirement savings for a large percentage of our population are tied up in stocks thanks to the death of the pension. Asset and securities prices as a whole are a large concern for the fed when changing policy, as a result.
https://www.chicagofed.org/research/dual-mandate/dual-mandat...
* employment
* price level
* moderate long term interest rates
Cf. https://www.federalreserve.gov/faqs/what-economic-goals-does...
I'd be interested to see them, especially any from the last 40 years (i.e. post-Volker).
For pre-Volker, I'm interested in your sources from the early-mid 70s, and the way inflation was "controlled" in the years immediately surrounding the release of the gold standard.
People who don't know shit about economics sure love to bust out their ignorant opinions.
They believed the inflation was transitory, and were going to wait it out. Now it's very clearly not transitory, so they are taking action
hint: https://www.hussmanfunds.com/wmc/wmc110404.htm
spoiler: " there is in fact no strong "tradeoff" between unemployment and general price inflation, and almost certainly not an exploitable one. The Phillips Curve is essentially a statement that lower unemployment is associated with higher inflation in real wages. The strategy of accepting higher inflation in hopes of achieving lower unemployment (which is the basis of Bernanke's policy efforts) not only drops the phrase "real wages" but reverses the direction of cause and effect. "
Also, it has clearly not been transitory for most of 2021. The "transitory" claim was backed partly by the pandemic, but relied on a 1-year lag. If, however, you used a 2-year lag (thus eliminating pandemic effects...
Average and poor Americans would be better off with a simple formula to set money expansion. Then fire the private 'Federal Reserve' banksters and let someone else have the contract to clear checks.
It is long past time to end the 3rd central bank.
How great would it be to live in a world where house prices never rose, and people just invested in stock or bitcoin.
Ok, perhaps that partly makes sense for people buying homes. But paying rent cannot possibly be considered an investment; unless you are trying to marry a landlord or something :-)
I guess the people in the US ignore it completely, we just weigh it wrong :-)
> Why aren’t house prices included in measures of inflation? Should they be?
https://www.economist.com/the-economist-explains/2021/07/29/...
uhh what? It's the same situation in the US. "houses" aren't a component of inflation, but "housing" is. According to the BLS, the "Shelter" component makes up 33.3% of the CPI.
If we included housing, it would push up mortgages, which would make housing more expensive, which would drive inflation, which would push up mortgages, and so on.
Meanwhile my UK mortgage has 1.6% interest rate, and my house has gone up in value by 100k since I bought it 18 months ago, and I've just received a raise specifically to adjust for increased market rates and inflation. Life's pretty sweet here in comparison to back home. Needless to say; not going back :)
> my house has gone up in value by 100k since I bought it 18 months ago
Yikes, that sounds like a heated housing market, unless your house cost £ 20 million to begin with :-)
It sounds evil at first glance, but thinking about it some more it might be very good.
This discourages people from buying houses with leverage when they think inflation is going to accelerate. It won't help them, because the leverage is inflation-indexed! Here in the USA, every time inflation starts to accelerate people hoard housing; this causes all sorts of social problems.
Also: in the USA the only other ways for most ordinary people to easily hedge against inflation are buying gold or loaning money to the government (inflation-indexed government bonds). It sounds like your country has inflation-indexed mortgage bonds. I would rather lend money to my neighbor than my government.
Personally, I am incredibly impressed with how you guys dealt with the 2007 global financial crisis. You did the right thing: you threw the criminals in jail. Even though they were bankers. I now evaluate Iceland's economic policies from the starting assumption that they understand the world better than we do.
Those with the power to match prices with wage demands stay where they are, and the cost is transferred to those who cannot push wages, and those who lose their jobs.
That's actually how inflation is actually controlled - via the threat of unemployment and wage suppression.
Interest rate changes are the Wizard of Oz. Wage suppression and unemployment are the man behind the curtain.
Just think:
What is more competitive than a company where its employees work for free?
Should we be surprised that this is exactly where things are going? Not literally for free, but to its modern equivalent - the minimum people accept before they get to the streets with pitchforks. The modern day version of working for free is working for a salary where you basically don't get much of it except for basic necessities required for said job. Putting kids in debt out of college has been "perfect" for this. The revolting house prices idem. So workers are forced to be in debt for their whole life, and get to enjoy 2 weeks of holidays out of 52 in a year, while the rest spending on surviving. How far is that from working for free, in the modern day, really? What is the alternative, be a social outcast and go live in the woods? Risk it all and be entrepreneur?
Unregulated capitalism is working as intended. And that's exactly the problem.
From my perspective it seems some are quick to want to change to another system on any signs of problems in the initial system; where the new system fails to have any good feedback loops built in.
I also see a lot of one off solutions that don’t fully understand the systems problem that only introduces more complexity to the system usually without solving the initial problem.
I am worried about a wage price spiral. But I’m not expecting it to commence yet. Common sense suggests most people are not going to look at inflation forecasts and say “well, I’d better ask for a preemptive wage rise”, rather people will notice price rises, adjust their budget, and when the rises become intolerable they will say “hang on, I really need a pay rise.” Most people are too busy to follow macroeconomics.
So I’m expecting wage bargaining and rises to become a central theme in 2022 once people really notice. Even at an annualised rate of 5%+ that takes time.
It’s very difficult to see how wage rises won’t be granted, which makes me wonder how politicians are imagining they’re going to prevent a spiral. This is exactly why we don’t print money and put it into retail accounts.
I’ve pointed it out before, but in the 80s in Britain Lawson and Thatcher spent years trying to end the spiral, and they really struggled despite throwing everything they could at it. Wage spirals are as much about politics and psychology as they are about economics.
Prices stop rising. Look back over the last 40 years and you'll see the same pattern. Inflation spikes are sharp but short. In the last few decades, inflation spikes tend to be followed by deep recessions as well.
For example, in 2008, the rip-roaring CPI print of 5% seemed very menacing. Few suspected that an honest to god financial panic was right around the corner.
For further evidence, consider the financial and commodity markets:
- the eurodollar futures market recently inverted
- the 30 year treasury is yielding -5% in real terms
- the dollar is not crashing in the face of rising CPI, as the popular wisdom says it must - instead the dollar has been rising for a year
- gold, the eternal inflation hedge, has gone nowhere in one year and is at the same place it was 10 years ago
All of these indicators point to lower inflation and lower growth ahead. Possibly much lower.
Heck you can see that wage growth outpaced inflation in ~10 of the last 12 years. Isn't that a good thing?
In 1998 Alan Greenspan testified to Congress that central banks lease paper gold to suppress the gold price. '... central banks stand ready to lease gold in increasing quantities ...' https://www.federalreserve.gov/boarddocs/testimony/1998/1998...
It is law that Treasury is allowed to secretly manipulate prices of cuurencies, stocks, bonds, and commodities. https://home.treasury.gov/policy-issues/international/exchan...
It's rigged and the chance of the insiders not trading for their own personal accounts is approximately zero.
Occasionally the commoners get a few scraps like WSB on gamestonk in early 2021.
This is the signal that tells an employer that "the market" is valuing people more and so you should pay more to keep them.
Inflation based pay rises are a myth, in that the company is giving a pay rise because the rest of the market is giving pay rises and that delicate balance between retaining people and losing people can be upset.
Should you leave to find something better paid elsewhere? Sure... if money is all that drives and motivates you. But it's not always the case geographically that you have options, and remote work remains somewhat limited for the majority of people.
If people leave my employer will that bump my salary? Sure... if enough people leave and their exit interviews all reveal this "we are under valued and I can earn more down the road" pattern. If people leave for a myriad of personal reasons then the company has no evidence that the market is paying more and they should bump their salaries in return. Even then, it will happen next year as this stuff takes time to build the evidence and result in the change.
Inflation based pay rises were not what you thought they were, and now inflation is rising it's plain to see.
Should we really expect wage gains to march inflation within six months?
I have been traveling abroad in situations where the local currency devalued significantly overnight. It took a few days for shopkeepers to adjust. Nobody knows what the spot rate of inflation is; by definition you need historical data.
The only way this can work is if wages, salaries, etc., don't keep up with inflation.
None of that government spending everyone loves comes for free.
If you want to make good pay, you have to make it happen. You have to change jobs occasionally (every 2 years). You have to suck up a bit to managers. You have to be at least average at your job. You have to manage your CV. And you have to negotiate.
I'm not saying this is right or fair or nice.
I'm just saying the vast majority of people I've worked with don't do any of those things (except for being at least average at their jobs). Then they're surprised when it's been 10 years, they haven't gotten a raise or a promotion and they don't have a CV that can get them one.
If you don't play the game, you will lose. We all know the game isn't fair. But you have only those options.
I've played it for the last few years and I'm very well paid. Playing does work. People just don't, in part because no one tells them to.
Average doesn't mean great. It might not even mean good tbh.
I've worked with a few terrible people who pull the average down so that helps.
That is complete garbage.
What you mean is that you have to change jobs if you don't see the potential for growth and growth opportunities.
https://www.forbes.com/sites/cameronkeng/2014/06/22/employee...
Quite the opposite: cleaners don't make much money. But managers do. So if you're a cleaner and you want more money, have a plan to become a manager. Move companies to somewhere that pays better. Start your own cleaning company. Just don't spend 40 years cleaning, never ask for raise, never change jobs, work for minimum wage and wonder why you never became a millionaire...
Of course, if you're content being a cleaner then good luck to you! Just don't say "capitalism cheated me" when you got exactly what you said you were content with...
If worker pay isn't keeping up but company profits and equity are, this means that people are overvaluing being a worker and undervaluing being an owner, compared to market equilibrium.
Why would that be? Risk aversion? With the latest advances in global connectivity, online business infrastructure, ubiquitous technology and so on, I'd expect risk to be as low as it ever was.
Something else? What am I missing?
Is it possible that this idea is just being propagated without much evidence to in effect create a state of peril? I would very much appreciate if someone has looked at any evidence.
I want to know why. Why was the HN diaspora not allowing dissent with the mainstream narrative? Mentioning inflation here was so harshly ridiculed, I was surprised the massive U-turn from the tech community. I saw the entire media changing the tune. That means no one here is thinking from the bottom-up, it’s mostly servant to the mainstream media.
I’ve lost hope in people here. It used to be the wisdom of crowds. Now it’s the tyranny of the crowds.
I think I feel like leaving HN.
Time to leave.
Ironically, the politicians who purport to represent these groups often enact policies that make inflation worse.
The wealthy are are starting to lose belief in the value of the dollar, and will literally trade dollars for virtual tulip bulbs.
Feels like Hyperinflation of the Weimar Republic is fast on the way.
Further Port backups, or gas price strike by truckers could get us there this winter. Just a few days of hunger, and things will really kick off.
In the US at least it's fairly telling that wages and similar for normal people aren't legally tied to any real measurement and require explicit corrections by lawmakers, whereas everything that benefits law makers and their donors is tied to inflation.
GDP per hour worked increased by 1-2% yearly. ( https://data.oecd.org/lprdty/gdp-per-hour-worked.htm ) To increase wages, increase productivity.
What I'm seeing is a chart of real gains over the last decade. That's great!
I think part of the problem is we're using the same word to describe two different things...
"Russell Price, chief economist at Ameriprise, expects inflation to peak at 7.1% in December and January, for example. After that, he expects the inflation rate to fall toward 4% by the summer and below 3% by the end of the year."
https://abcnews.go.com/US/wireStory/inflation-painfully-high...
If the second one, there where is all that money going? Who is that "cost" that is benefiting?
As for where is the money going? The rising costs are due to increasing demand and simultaneous reductions in supply. A lot of pent up demand deferred by the pandemic has been released. Meanwhile suppliers have lost capacity due to shutting down factories, slimming down work forces and not maintaining or replacing equipment.
A lot of the money from increased costs is invested in ramping up production again. This is pulling people back into employment and kickstarting businesses that were suffering in the lockdowns. It’s funding necessary work. But some of it is being taken by suppliers who find they can ramp up prices and people will still pay.
Remember firms will always try to charge a fortune for their stuff. It's only competition that stops that happening. Competition is excess supply, or at least excess supply capacity.
When competition stops being effective, prices go up.
https://www.theguardian.com/commentisfree/2021/nov/11/us-inf...
Eventually these high margins will attract competitors and bring down the margins but it takes quite awhile to get a chip fab up and running, and similar with meat-packing, lumber mills, etc.
For those examples that is false hope. You can't just spring up a new competitor in the GPU filed out of thin air and expect it to work; Nvidia and AMD duopolies are so far ahead into the game experience wise that no startup could ever catch up no matter how much money you throw at it (even AMD is having a hard time keeping up with Nvidia and they've been at it for 30 years).
Not to mention the insane patent minefield that protects them from competition. Even Intel, a trilion dollar company with experience, patents and fabs can't catch up with the other two.
Granted, during the current shortage, basically any GPU will sell regardless of performance/value proposition which makes it very easy for Intel to enter the market right now, however, 2-3 years ago, when Nvidia and AMD GPUs were affordable and available everywhere, nobody would have ever considered buying Intel discrete GPUs as even their integrated ones were not well received.
Haven't they always been in the GPU market? Sure, they don't compete on top-end GPUs, but almost all their previous builtin/onboard GPUs:
a) Shipped more than NVidia or AMD
b) Were performant enough to satisfy 90%+ or PC or laptop owners.
Inflation hurts the poor, almost always, exception those with fixed interest rates debt burden.
So they don't really understand how much the restrictions are loathed by the working poor, who were already on the brink of bankruptcy pre covid restrictions.
Feels like I no longer to make money twice - once to get paid, twice to invest it such to beat inflation.
This is not true in the Phoenix or Tennessee areas, two places I know folks in the trucking business. Competition for drivers is fierce, and that leads to better offers from firms who have found a niche where they can charge more.