A great victory for labor huh.
To be less cryptic, there's a relentless chorus of people advocating for inflationary policies that achieve the exact opposite of their intended effect.
And we really should be expecting real wages to drop at the moment, that's a sign our economy is doing a good job at reflecting what's going on in the world. I'd be more concerned if they were all going up despite all these issues because it would mean we are at disconnected from reality and that normally comes with a crash after a couple of years
There are a few graphs from the US Fed that show it pretty well. Wages got very static after 2008 and started heading back up once we left the Great recession stagnation era.
Then we have the drop from recent events such as the war with Russia, covid in China causing lockdowns, supply chain issues.
More than likely as things recover it'll start taking up again
But politicians fighting inflation with higher wages and stimulus checks, as well as the chorus of idiots cheering them on, repeating the same mistakes as the 70s, is quite mindblowing.
How far do consumer sentiment and approval ratings have to drop for people to wake up to basic economic realities?
They didn't have the internet in the 70s, by the way.
People have been going on and on as though $600 was too much inflationary pressure.
You get that that is less then 1 months rent, right?
Which doesn't even include forbearances that add a few T more in consumer spending power, or artificially low interest rates driven by the Fed
Here's your inflation: https://fred.stlouisfed.org/series/RSXFS
https://fred.stlouisfed.org/series/PI
Maybe you can clue some of the others into it. Not like we have the internet and easily observable datapoints that makes it quite obvious huh.
Instead have to hear the inane idiocy of economically illiterate people promoting policy that does the opposite of what they want to achieve
The stimulus bumps are quite visible, but subsequent data is right in line.
So apparently taking about personal income was just happenstance, since you pretty obviously were trying to say "it's rising wages that are doing it" and then have been backpedaling everytime I press you to explain why.
So we face successfully established there's inflation, and you've made no argument as to why we should think it's fiscal policy related rather than supply chain - you know, that big thing which has been stressed and suffering shortages repeatedly the last 2.5 years.
Supply of effectively every good is higher than prepandemic. Demand is even higher. Retail sales have exploded vastly above trend due to fiscal injections. This is NOT a supply side issue, this is consumers mass buying which leads to shortages. If it were a supply side issue, you'd see big hits to corporate earnings, instead they became massively inflated due to excess consumer spending.
Personal income is rising much faster than sustainable for 2% inflation. Are you aware that money is nominal? People getting paid more means nothing if prices rise faster than they're getting paid. There's zero inherent value to a dollar.
Inflation is a product of supply and demand, not just one or the other. When there's an imbalance, prices rise to a new equilibrium point.
Go on, cheer for higher nominal wages as consumer sentiment sits at all time lows and real wages are deteriorating faster than any time in history
How can you possibly claim this? Where have you been for the last year? Energy embargos, dramatic slow downs in trade with China, excruciating shortages of basic/fundamental electrical components.
I have to assume that you have ignored all evidence that doesn't support your narrative. The trouble is this inflation would have happened with or without individual stimulus moneys.
It’s just bread and circuses.
$1,200 per adult in April 2020, $500 per child.
$600 per adult in December 2020/January 2021, same per child
$1,400 per adult in March 2021, same per child.
A fully qualified two adult, two child household received $11,400. For a median income of 2x $31k, that’s 9% of the household’s per annum income. If you both had a job during covid, as most people did, it’s pure inflation.
Inflation is measured via a basket of goods measure, and corporations have freely taken all those basics and gone "welp must be circumstance" while posting those profits.
Prices surged before any stimulus was handed out.
No matter how much you take away from those 0.01% of people, it’s not going to do much to fight the inflation of the goods that people are worried about the inflation of.
Let’s take food for example. Perhaps the 0.01% might consume 10x more food than regular people at most (factoring in waste). Even if the 0.01% were to be taxed to the point where they can eat nothing, it’s not going to create very much more supply of food for everyone else.
Then there is fuel. The ultra rich probably do consume a lot more of it when you factor in things like jet flights and such. But even if it’s 100x more, it’s not really freeing up so much to actually affect the market for it.
Now what taxing those guys might do is reduce the price of the goods that they do in fact consume more of. Things like housing where the rich will own a lot in order to generate revenue.
And indeed these productive assets were inflated significantly due to the loose monetary policy regime that we have been living in for some time.
But these are not the resources that most are concerned about with regard to cost of living at the moment. That’s food, fuel, etc.
Because of supply chain issues, it's more money chasing fewer resources. I think people focus too much on the money supply and not enough on supply chain shortages. IMO, the bump in stimulus money given would not have caused this level of inflation without also the decline in supply to go along with it.
600 a week for people on unemployment on top of normal unemployment.
1400 of stimulus checks to a large percentage of Americans.
PPP loans given to business that large weren't paid back
Lots of little stuff that funded stresses institutions.
Stimulus isn't too blame at all for the inflation we are facing, supply chain limits and war are also responsible.
However, to say stimulus was "just 600 dollars" is crazy misrepresentative and totally ignores that the American stimulus package was literally the most robust and impactful examples of stimulus in the world.
My hunch when some these places say they can't get talent or etc. they have a particular idea of what they want: young & low pay & desperate. and all the complaining about labour shortage means: a shortage of low pay workers. Esp here in Canada as there was a couple years where the temporary foreign worker program wasn't fully operational due to COVID.
My wife is trying to get back into the job market after 10+ years out. There's supposedly been a labour shortage here in Canada. She has -- in addition to being a mature functional adult who has raised a family and managed a home -- almost a decade of work experience (in the past) in marketing and some design at Apple, an honors degree in Anthropology with a boatload of academic awards under her belt, an a two year programme in UX research & design from a local university. She has been applying for junior positions and doesn't even get nibbles. Even local retail jobs etc. she's gone for have not responded.
You can say the same thing for $250/hour developer jobs. Some might do it for $5 an hour (well or not can be debated), and some wouldn't touch it for $250/hour. Free market. There are many companies out there to choose from. If the person is qualified, they will find it. If they are not, they will need to get qualified to ask for more money.
I'm not sure you understand how a labor market works. There may be (and often are) local/temporary inefficiencies, but if "hoarders" are taking most of it, then why are there so many unfilled jobs across the country – including high-paying jobs?
Similarly, if employers aren't compensating employees fairly (which may be the case while the market adjusts to inflation + recession), they can only do that for so long before the market effectively forces them to pay/treat employees more favorably (no government intervention necessary).
At the same time, there can be an overall deficit of meaningful work for decent enough wages at the societal level.
The hoarders can selectively employ people who will make them richer, all while the rest of society continues to crumble around them. That's what's been happening in America for decades. Either you're in the upper class or things or actively getting worse.
The magical device on which you're reading this comment would not have been possible without companies employing people they thought would help make the company richer. It's not a zero-sum game; we all benefit as a consequence of capitalism – from the richest of the rich to the poorest of the poor.
Have you ever owned a business or hired someone? If so, did you deliberately select employees who would not help the company be successful, and if so, did that somehow help prevent societal collapse?
I hear so many lies about the "evils" of capitalism (from all sources, not just here); I fear people are starting to believe them, as we're slowly being brainwashed into joining the next reboot of "let's see – again – how badly we can screw up the world with communism".
People complain about central banks and low interest rates or about the decline of the west not because of a lack of prosperity, no the problem is that there is too much prosperity in the hands of the wrong people.
During times of actual scarcity, people are busily and happily working to get rid of the scarcity which is why we constantly try to create more jobs and why we constantly induce artificial demand increases, to maintain the scarcity that capitalism demands.
> fear people are starting to believe them, as we're slowly being brainwashed into joining the next reboot of "let's see – again – how badly we can screw up the world with communism".
You can abolish capitalism by introducing an actual free market, not one in name.
This is one of those "myths" of capitalism -- "everyone" benefits. While I'm a recipient of the benefits, I also realize that it's a system with flaws that drives inequity and preys on the poor.
I'm not sure that the impoverished really benefit from the constant stress of working 3 precarious part-time jobs to pay for rent and food, with little to no time for family or leisure. But, hey, latest tech gadget is cheap, so that's a universal benefit, right?
I always thought the American Dream was to own a house through hard work. Now working at multiple places barely covers your monthly expenses, forget buying something. Decent housing shouldn't be an intractable problem, but looking through the capitalistic lens it sure seems to be. But pretending that places where it fails are "lies" and that we have to become the Soviet Union is just fearmongering. Perhaps there are social interventions that could help?
Prices can be sticky in more than one way it seems, and that might make for some interesting economics.
The market isn't particularly free when people need to eat
It'd be much freer with guarantees for basic necessities
> It'd be much freer with guarantees for basic necessities
You do know that would literally just make the problem worse, right? I mean, it sounds good to someone who can't work for legitimate reasons (small percentage of the population), but it also sounds good to everyone who has the capacity to earn their necessities, but would rather have it handed to them instead. It also sounds really good to politicians who seek (re)election by promising everything for free, knowing perfectly well that nothing is truly free. That kind of reasoning is what got us into this inflation mess.
Also, the "free" in "free market" doesn't mean what you seem to think it does.
Nope. You'd be wrong. It's the trillions of dollars unnecessarily printed by the fed. A large part of that went to business owners who didn't actually need it, but took advantage of all the "free money" (and who could blame them when the gov't practically gave it away). That money was quickly invested into real estate and equities markets, leading the way for inflation in the rest of the market, albeit with some delay.
And we're not even at the worst yet.
Depends what you think "the problem" is. To my mind the biggest problem is the hours of human life wasted on performative make-work while most citizens in a supposedly rich country barely spend any time on things that are actually fulfilling for them.
> Also, the "free" in "free market" doesn't mean what you seem to think it does.
On the contrary, this looks to be one of the minority of cases where the term is used correctly (which makes it a bad term, but I fear we're stuck with it).
The idea that citizens of a rich nation has some natural right to live a fulfilling life just because the country happens to be rich, is hubris on the one hand, and also entitle on the other.
People work to obtain the resources to live off. Some can produce _more_ (due to luck, or skill), and those are the ones who would be able to give up productive work and focus on "what's fulfilling" (aka, climb up the maslow pyramid).
Some people don't get to do that climb - that's just reality of scarcity of resources today. Until the day the world becomes like star-trek, where people's basic needs a completely covered without any labour input from any humans (in which case, they spend time exploring the galaxy!), it cannot be that all people fulfill their higher needs in the maslow pyramid.
> People work to obtain the resources to live off. Some can produce _more_ (due to luck, or skill), and those are the ones who would be able to give up productive work and focus on "what's fulfilling" (aka, climb up the maslow pyramid).
But the biggest factor that enables them to produce more is the society around them. So the idea that the surplus should go to the individual rather than the society seems pretty entitled. If we're a rich country, we should be able to allocate those riches in a way that produces the most benefit.
> Some people don't get to do that climb - that's just reality of scarcity of resources today. Until the day the world becomes like star-trek, where people's basic needs a completely covered without any labour input from any humans (in which case, they spend time exploring the galaxy!), it cannot be that all people fulfill their higher needs in the maslow pyramid.
But the patterns for how we'll live when resources are virtually unlimited will be set today. And by most objective metrics, we're already far past the level of having enough for everyone to live on - even the very poorest have food and shelter (and most rich countries manage to provide them with healthcare and education). Conversely an increasing fraction of increasingly many jobs is, as I said, performative make-work rather than something that actually increases societal resource output; those jobs are a dead-weight loss.
We need to start being ok with people working less and retiring earlier. Otherwise our lives won't get better no matter how much more productive we get.
If living in such conditions is better than working some of the jobs that sustain large parts of society, I'd say it's about time to reevaluate some things. Are we ok with a society designed to sacrifice some percentage of its people's lives?
Instead, we should tax incomes that have very little to do with human work like CO2 taxes or land value taxes to fund UBI. In essence, the UBI grants people a basic CO2 exemption and a small share in the land of the planet. I would argue that is fair.
A mix of market and command is necessary. But this whole thing isn't really relevant because both markets and command systems have very wide variety in implementation.
No, it could mean that the market is booming and pay rates haven't caught up. IE, what happened during the Covid-era of 0% interest rates.
It could also mean that handouts are making people not work as hard or not wanting to work for less in general.
Also, those "handouts" have long since expired and the labor issues remain.