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Comment by tqi | Hacker News Reader

Its interesting, I thought it was pretty well established that COVID era stimulus helped lower earners make real gains, even adjusted for inflation, while higher earners who did not get stimulus checks lost ground?

From page 36 of the paper: All deciles during this earlier period experienced annual real wage growth, with the growth being the largest for the bottom two deciles of the wage distribution.

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I’m pretty confused where you’re coming from. Stimulus checks were a one or two time payment of a couple thousand dollars, but stocks and corporate profits went absolutely parabolic.

The share of wealth owned by the richest people went up far more than the bottom 90 (or even 99) percent. The data absolutely supports this perspective as well: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

The stimulus was not just the checks, it was also pretty generous unemployment, and the discussion was about incomes of workers, not wealth.

Don’t forget about the PPP loans.

Unemployment almost by definition means they’re not getting as much money as they were before.

We can focus strictly on wages, but for higher earners, it doesn’t tell the entire story, especially if we’re focusing on my new detail details like a couple thousand dollars per person.

My cousin and many others I knew were getting more money from unemployment than when they had their jobs during covid. Though I don’t believe that caused inflation. Inflation was an international phenomenon and countries experiencing inflation had very diverse stimulus responses to COVID. It seems the Russian invasion of Ukraine, a pivot to a goods based rather than services based economy, coupled with climate changed caused shortages and retiring boomers caused it.

Sustained inflation is always caused by money printing. Most of the mechanisms you are describing would only effects shifts in relative prices.

Many people were making more money on unemployment than their standard wage due to the covid increased pay. The fed paid $600 on top of state benefits for a few months and then $300 for more than a year after that meaning people were seeing 16 -> 24 dollars an hour in wages for not working in my state of Georgia for instance. It was often smarter to stay unemployed until that ran out compared to local wages.

While losing a job is a pretty unpleasant disruption to one’s life, it can also be the case that the next job will be better and one ought to (in hindsight) have changed jobs sooner. Potentially the shake-up of employment in low-productivity sectors was also good for the economy (and in hindsight I think this strategy worked better than subsidising people in their current jobs, ie furlough, which is what many other countries did).

Yeah agree, share of wealth definitely went up for folks who had the money to be invested in the stock market.

My recollection is that some combination of stimulus checks / COVID dynamics made it much harder to hire low wage workers, so employers were "forced" to raise wages in response. At the same time, higher wage workers who got "normal" raises were not keeping up with inflation.

https://www.reuters.com/business/us-job-growth-picks-up-may-...

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