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Comment by kalupa | Hacker News Reader

So, wealth is getting redistributed downwards because of inflation. Am I getting that right?

Wouldn’t want that to happen. </sarcasm>

poor people spend a higher percent of their income on gas, grocery, and rent. All the things being inflated. their wages aren’t keeping up either

so no you’re wrong. actually half the reason we’re in this mess is the fed was being too woke trying to lower unemployment rate for ”marginalized” groups not because they were favoring the rich

plus the fed raising rates is destroying asset prices, which are held by the rich. in fact elon and bezos etc have lost double digit percents of their net worth

I think that is really hard to say. Depending on where the salary growth and demand is, it could easily worsen inequality.

If salary for white collar workers and inflation goes up too much, employing blue collar work becomes unprofitable and those workers get locked out of the labor market.

I think this is likely a bit backwards. If the white collar salaries go up too much relative to blue collar salaries (or more generally if salaries become excessively widely distributed), then employing low wage workers becomes _cheap_, at least in a relative sense. This is fine for the companies that want to employ them, but it means that those employees’ incomes may increase much slower than the prices of anything they want to buy, and they get locked out of the market for consumer goods.

I think we are saying the same thing.

You are just giving the hypothetical answer where blue collar salaries stay low and I am giving the hypothetical where blue collar salaries rise.

If blue collar wages stay the same, then yes labor costs are discounted.

If they raise, it may make sense to eliminate the position via automation or shipping the job overseas.

Wages are generally sticky, but nobody will take a job if they can't feed their family and pay rent, so inflation will eventually drive the wages up or make the position obsolete.

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