Are you suggesting that people are missing in the workforce in the US because of the federal reserve's policies, and if so, by what mechanism do you believe this is happening?
The Fed has engineered a soft landing and some moderate wage gains have occurred over the last 1-2 years. It’s up to workers to organize if they want to accelerate wage increases and lock them in. Fiscal policy is the domain of Congress, and at this time (most unfortunately), they aren’t willing to do anything to improve Labor’s situation.
I do want to touch on why the Fed took extraordinary measures during the pandemic (both with lowering the benchmark rate and with acting as a backstop of last resort wrt buying large swaths of bonds) [3]. With enormous uncertainty at the time (will there be a vaccine? When if at all?), there was a risk of total economic collapse and loss of collective faith. Lowering the benchmark rate was like a pilot light ready to relight the economy once lockdowns were lifted, and them buying bonds ensured liquidity (preventing a collapse in bond values, as well as the mortgage backed securities market freezing up).
There is strong evidence that remote work allowances during the pandemic contributed to driving up home prices [4], but zero interest rate policy didn’t help frothy real estate prices either.
[1] https://news.ycombinator.com/item?id=34554546
[2] https://www.federalreserve.gov/econres/feds/files/2022081pap...
[3] https://archive.is/2020.03.24-154938/https://www.nytimes.com...
It's not a willing situation out of lack of care, when the will is strictly antagonistic.
[1] https://www.bloomberg.com/news/articles/2022-03-17/powell-tr...
^a, I'm willing to forgive some tech companies because it was a deliberate twist of the arm by raising rates.
Tech layoffs are Capital dictating to management to improve profits. If you don’t like it, unionize (dead serious). To not do so means continued powerlessness and to be at the whims of billionaire fund managers whining about their fund performance. Even with the total tech layoffs this year and last (~250k per layoffs.fyi), that’s one month of US added payrolls. I understand they’re not equivalent roles and pay, but I suggest taking it into consideration as a macro sign. It’s not 2001 or 2008.
The US, and further the Fed have little to worry about by way of demographics.
Tech layoffs consist of more than 'Capital', significantly more. 'Capital' is not reacting out of pure hatred for labor either, they are reacting to a specific phenomena, which is the Fed swiftly raising rates.
Don't rationalize and defend top-tier sociopathy like this. These people say what their intentions are, openly declare that they will do what they intend to, and they do it. At this point, there is no objective conclusion that can be reached other than these people waging a war against the majority of the people for the benefit of minority capital.
This has little to do with actual individuals. When those go away, they will be replaced by those of the same ideology by those who put the current ones to those places. This is an ideology.
> I am entirely serious when I suggest unions and organizing; it is the only civil solution against tyranny at the top.
Hopefully. History shows that when things come to a head, the elite does not hesitate from using violence at any cost. That was how the fascist movements came to being - as 'strike breakers' for private industrialists. Then they were funded and politically backed by those industrialists to have them become 'movements'.
If I tell you that you might cut yourself by juggling with knifes and then you do, did the knife comply to my request or I just simply called it due to my observation?
What do they do for money?
It's an unchanging fact of the internet that people show up complaining about inflation/the Fed/not being on the gold standard and are always cranks. Strangely, this is still true even when there is inflation.
Coast, contribute to excess deaths, live in a basement, take odd jobs that are more or less on the books, panhandle, join a monestary...
Over the last 13 years the fed has played a much greater role in the market by purchasing securities and setting the discount rate near to zero. The goal being to soften the blow of the housing collapse and to help being the economy back up. What I find interesting about the low interest rate is that low cost lending changes what types of projects are economically viable. If you look at the formula for NPV the discount rate is within the denominator. What this is saying in other terms is that a projects value is manipulated by the discount rate. On the whole low yield capitally intensive projects are possible to take on during a time of low lending costs. Sure the math makes sense here but what does this mean in aggregate. Does it make sense that the value a project supplies to humanity is dependent on the interest rate? No it really does not, it's not required for it to be proportional whatsoever. Capital is just a standardized term for motivation. All that money can buy is someone else's time or effort at the end of the day. What the NPV formula is truly giving us is a ratio of how much human effort will be required and how much output you are likely to get from such efforts.
One of our issues both nationally and globally is that our interest rate is too low, (and we have no way to fairly correct for this). Higher cost of lending prunes projects that are low yield. This prunes projects that are not a large benefit to society. The fed has a hard time moving back to this because of the extreme difficulty everyone would face. Let's say they raise the rates to 18% suddenly homes value must drop to reflect the people's ability to pay the new mortgage rates. Best case this would dramatically reduce worker mobility. Worst case you wipe out the largest asset most might have.
I do believe the fed is used as a tool is used to keep people working. If you track the cost of staples such as a loaf of bread or milk vs the hours required to earn such things on minimum wage you will find that it's all about the same over time. Logically this makes no sense whatsoever. Does this mean that we have gotten no better at producing these commodities over the last 100 years?
The explanation that stands up, however, is the government printing and spending excessive amounts money, backed only by the promise to print even more.
Sustained multi-year inflation is more or less always due to government policy of printing money. Although these days the stats suggest it might also stem from a general energy crisis; the West has done a pretty solid job so far of cutting loose any reliable sources of energy. Still government policy, but it'll be a change from the running printing presses.
There's no indication that this is a real thing given that leisure, hospitality, transport and warehouse workers have seen the strongest wage growths in decades, the first two groups outpacing inflation and seeing real wage gains.
In fact fairly large wage increases in the service economy are one of the biggest contributors to inflation (wage-push inflation) and the basis for these rapid pay rises is the constantly tight labor market, hence the title of the thread.
It's not like it's hard; and mind, I think it's a good thing interest rates are going up, bringing a return to sanity to the economic landscape, but the Federal Reserve by it's own admission wanted to increase unemployment.
They succeeded. Now they're screeching because people are dropping out of the rat race/clearly orchestrated insane financial environnent because it is straight up clear to anyone with more than a handful of neurons to rub together that things have been completely unsustainable for a while?
Color me surprised. /s