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Analysis finds Australia’s inflation being driven by company profits, not wages

theguardian.com

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Re: Analysis finds Australia’s inflation being driven by company profits, not wages

#91

Post by RichEO »

gruez wrote: post #47
zmmmmm wrote: post #21

It's yet another example of the gap that always exists between economic theory and economic practice. In this case, what we have is that every player in the food chain has taken advantage of supply shortage to eke out additional margin along the way. And why not? Your products are in demand and there are buyers who are willing to pay more than the theoretical market price. The actual situation is that even if competi…

>And why not? Your products are in demand and there are buyers who are willing to pay more than the theoretical market price. What do you mean "theoretical market price"? What you're saying makes no sense in the context of standard microeconomic theory. If supply is constrained, then microeconemic theory predicts that the market clearing price will go up. Companies can always price their goods at higher than the mark…

He's talking about the supply shocks caused largely by the Ukraine/Russia war.

Re: Analysis finds Australia’s inflation being driven by company profits, not wages

#92

Post by Grimburger »

gruez wrote: post #49
JumpCrisscross wrote: post #28

Earlier quoted context omitted.

> Australia Institute is a thinktank, funded by the Greens Source? If true, this doesn’t belong on HN.

https://en.wikipedia.org/wiki/The_Australia_Institute >The Australia Institute is a left-wing[2] public policy think tank based in Canberra, Australia [...] >The Australia Institute claims to not accept donations or commissioned work from political parties.[51]

They don't publish who funds them, at least ASPI is open about their money coming from overseas weapons manufacturers.

Re: Analysis finds Australia’s inflation being driven by company profits, not wages

#93

Post by mrjin »

pmontra wrote: post #6
WalterBright wrote: post #4

The wage-price spiral theory of inflation is bunk. Inflation is caused by the devaluation of excessive printing of money.

Central banks have been printing money for years (quantitative easing, "whatever it takes" , etc) and there was no inflation.

>there was no inflation.

Of course, there was inflation but could not be reflected by CPI. Just look at the asset prices, can you explain the dramatic increasing? In the past, printed money mostly went to rich people and made asset prices skyrocketing. But this time is different, people live by paycheck got some chunk of it. And here we are.

Re: Analysis finds Australia’s inflation being driven by company profits, not wages

#94

Post by super256 »

deltree7 wrote: post #58

Tobacco companies publishes pro-tobacco research : Reddit/HN --- Pitchfork, Pitchfork, Pitchfork Anti-Corporation dude publishes anti-corp research : Reddit/HN --- Bow, Bow, Bow It's unbelievably pathetic how smart people can be easily duped as long as it fits their narrative. Yeah, it's the same crowd that feels superior over QAnons

I posted this because I found it interesting (and especially how HN would react to it), and not because I necessarily agree with it. Especially because I have a 100% disconnect from Australia except that I find Kangaroos funny. I only have a very narrow knowledge about the political climate and monetary policies in Australia.

There are many different opinions in the comments, they are worth checking out. I certainly learned a few new things. If you had a bad day, just take a step back.

Re: Analysis finds Australia’s inflation being driven by company profits, not wages

#96

Post by dragonwriter »

andrekandre wrote: post #90
WalterBright wrote: post #4

The wage-price spiral theory of inflation is bunk. Inflation is caused by the devaluation of excessive printing of money.

> The wage-price spiral theory of inflation is bunk. Inflation is caused by the devaluation of excessive printing of money. is that the only possible cause?

> is that the only possible cause?

No, its is a definitional axiom of certain “economic” religious sects, like the Austrian school. In a sense, since prices are a product of a number of factors including money supply, you can always construct a hypothetical alternative monetary policy which would prevent inflation, so any inflation can dogmatically be constructed to be a consequence of too-loose monetary policy.

Re: Analysis finds Australia’s inflation being driven by company profits, not wages

#97

Post by andrekandre »

gruez wrote: post #56
quitit wrote: post #48

Every company I work with is trying to make up for profit lost over the covid years. Surprise surprise company after company are now posting record profits.

As opposed to what, them normally not trying to increase profits? Had the pandemic not happened, would we expect CEOs to be like "meh, the last few years were pretty good so I'm not going to try too hard to make more money"?

  > As opposed to what, them normally not trying to increase profits?
yea, actually that.

i dont think it would be unprecedented if some companies said "hey we are making a healthy profit already, so in order to not harm our customers we'd like to keep prices as they are or reduce them if possible"...

Re: Analysis finds Australia’s inflation being driven by company profits, not wages

#98

Post by chii »

firecall wrote: post #36
chrishare wrote: post #11

There are so many threads here. The reserve bank governor is deeply unpopular in the broader public because of 2021 comments he made about there being no interest rate increases needed until 2024 [1]. As mentioned in the article, many companies are posting record profits, including supermarkets [2] - leaving low and middle income people hurting, and working more hours or side jobs. Those same people also face an adve…

All very good points! We've had wage stagnation for ~15 years. I've long wondered what it is about our job market that keeps wages down whilst company profits continue to grow. Perhaps an unspoken collusion around wages, or maybe lack of salary growth in government jobs that in turn pushes the private sector. Lack of competition and choices is another issue, as is Australia's dispersion of cities. It's not straight f…

> It's not straight forward for someone in Adelaide to take a job in Sydney that pays more

why isn't it straight forward? There's nothing stopping someone from interviewing (let's say, remotely) and accept a job in sydney while in adelaide, and then move when they secured the offer.

There's some moving costs - but i would imagine it's going to be in the order of about 1-2 months of rent at most. Of course, if you have kids, with school and such, then you'd have a harder time.

Re: Analysis finds Australia’s inflation being driven by company profits, not wages

#99

Post by firecall »

Grimburger wrote: post #19
chrishare wrote: post #11

There are so many threads here. The reserve bank governor is deeply unpopular in the broader public because of 2021 comments he made about there being no interest rate increases needed until 2024 [1]. As mentioned in the article, many companies are posting record profits, including supermarkets [2] - leaving low and middle income people hurting, and working more hours or side jobs. Those same people also face an adve…

> The reserve bank governor is deeply unpopular Only 30% of people have mortgages, why should the remaining 70% care, many can even put money in savings accounts again after 15 years of them being basically worthless. He never said interest rates wouldn't rise either, he basically said they don't forecast the conditions that warrant a rise won't happen until then. Here's a pro-tip if you took on too much debt under t…

> Only 30% of people have mortgages, why should the remaining 70% care

Because the remaining 70% rent, with many wanting to own a property someday.

Higher mortgages mean higher rent.

Australia has very little social housing.

Renting for families is an unpleasant experience. You can be forced to move with little warning, and finding a new rental in your area can be very difficult and sole destroying. So many would love to own if they could, if only for the stability it brings.

We have many problems!

Re: Analysis finds Australia’s inflation being driven by company profits, not wages

#100

Post by cuchoi »

phkahler wrote: post #70
abigail95 wrote: post #54

Earlier quoted context omitted.

If you're going to say there's a gap in theory, could you at least explain which economic theory is showing the opposite result here?

Show me an economist that uses the word hysteresis. Their models are quite primitive IMHO and not because they're powerful like the ones used in thermodynamics, but they act like they are.

It is a pretty common concept among economists. IIRC it is even covered in Mankiw's Introduction to Economics textbook.
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