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Worker pay isn’t keeping up with inflation

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Re: Worker pay isn’t keeping up with inflation

#161

Post by totalZero »

cissou wrote: post #43

Is it not rather that the inflation of the past 6-12 months has taken everyone by surprise, including employers, and the wages haven’t had time to adapt yet? What we don’t see in the article’s graph is that inflation used to be somewhat consistent but has risen sharply starting in March 2021: https://tradingeconomics.com/united-states/inflation-cpi

I think you're on to something.

I have been traveling abroad in situations where the local currency devalued significantly overnight. It took a few days for shopkeepers to adjust. Nobody knows what the spot rate of inflation is; by definition you need historical data.

Re: Worker pay isn’t keeping up with inflation

#162

Post by landemva »

gibbonsrcool wrote: post #117
landemva wrote: post #76

Earlier quoted context omitted.

'The Fed as a lot of tools at its disposal...' Average and poor Americans would be better off with a simple formula to set money expansion. Then fire the private 'Federal Reserve' banksters and let someone else have the contract to clear checks. It is long past time to end the 3rd central bank.

Except for their role as referee. Forcing banks to implement their real time payments system FedNow seems like a good thing, but I’m just learning about it.

How well did they do as referee in 2008? Did they take prompt corrective action when it was obvious banks and rating agencies were mispricing their balance sheet items, or mostly wait for explosion and then bail out their buddies?

Re: Worker pay isn’t keeping up with inflation

#163

Post by Thorrez »

aeternum wrote: post #104
nicoco wrote: post #56

Earlier quoted context omitted.

I think you're missing the point. With a 6% inflation, a 6% raise means the employees are worth the same as before , not more.

Depends on whether we're talking about real or nominal wages. Regardless, my main point is that most people must switch jobs to see the increase. Wages grew 6.6% for job switchers so it is keeping up with inflation. IT and professional services was 10.5%+ but again only for job switchers. https://www.valuepenguin.com/news/ADP-wage-growth-report

We're definitely talking about nominal.

wing-_-nuts said 'with inflation rising at 6%, will the company reconsider their 'standard' 2% raise?'

It wouldn't make any sense to say that if the 2% raise was real.

Re: Worker pay isn’t keeping up with inflation

#164

Post by the-alt-one »

tapland wrote: post #149
Kiro wrote: post #129

Earlier quoted context omitted.

Look at Sweden. The collectively bargained pay increase was below inflation in all sectors. You should unionize for many reasons but I wouldn't trust it as an efficient tool for pay negotiations.

I've never seen a pay increase above ~2% here in Sweden. Some union agreements allow larger (and lower) changes if the average increase is still the decided upon percentage.

Eh, I'm unionized and had a 13% pay raise. To be fair, they motivated that by saying that I should get up to speed with other engineer's raises instead of staying at a junior level (yes, I'm bragging).

Re: Worker pay isn’t keeping up with inflation

#165

Post by vlunkr »

turbinerneiter wrote: post #124
vlunkr wrote: post #116

Earlier quoted context omitted.

I don't know, if you hang out in certain parts of the internet, it feels like a revolution is coming, but it reality Bernie still can't win the primaries, so I don't think the numbers are actually there. But I also won't be surprised if the next generation of voters is more socialist-leaning.

The revolution will not come from the left. The "left" elites have forgotten the people, and the left in general is talking more about identity issues than class issues. The revolution will be more Trump than Bernie. Like in the early 1900, where more revolutions where fascist than communist.

Considering the capitol riots in January, yeah you might be right.

Re: Worker pay isn’t keeping up with inflation

#166

Post by harry8 »

paxys wrote: post #64
kelseyfrog wrote: post #53

Earlier quoted context omitted.

CPI includes housing as "Owners' equivalent rent of primary residence (OER)". If that inspires confidence in anyone, please, I'd like to hear how.

Standard internet discourse. Numbers are bad - "See everyone, things are fucked. I told you so." (which is what this post is about) Numbers are good - "Meh, I never trust the underlying data anyways. It is all meaningless."

A. Here's a wildly understated measure (like for like equivalent cost of housing systematically under-estimates inflation as defined as the increase in what you have to spend). This other accurately measured thing (wages) is not keeping up even with that biased measure.

Argument: It sort of is keeping up with the real thing (what you have to spend because we'll just take cpi) if you squint at a particular period? Actually it isn't, it's still being systematically underestimated.

CPI is a crap measure of what people actually face in increase of what they have to spend. What you can actually buy, the purchasing power of wages has not been going up. People aren't being fooled into be angry and bitter. Talk to them. Listen to what they say about their constraints in life. Ideally find some people you like for whom you can feel empathy with their situation.

Re: Worker pay isn’t keeping up with inflation

#167

Post by wernercd »

wing-_-nuts wrote: post #20

We had an all-hands meeting recently where we got to submit anonymous questions. One of the questions was 'with inflation rising at 6%, will the company reconsider their 'standard' 2% raise?' The lady answering looks dead in the camera and goes 'Honestly? No' and goes on to talk about how we're reasonably competitive with the local market. Hey, credit where credit is due, at least she was a refreshingly straight shoo…

I, on the other hand, got a 14% raise last month without prompting.

Not all companies are run by idiots.

Re: Worker pay isn’t keeping up with inflation

#168

Post by gentleman11 »

kelseyfrog wrote: post #142
thatguy0900 wrote: post #136

Earlier quoted context omitted.

I wonder how much time we have left for a real citizen revolution. Is is not difficult to imagine a near future with an automated and mechanized military and police with equipment that cannot go rogue. People in the US like to talk about guns as protections against state tyranny but not many have automated laser point defence for drone attacks.

A work stoppage is more realistic than direct combat. What are they going to do? Force us to work? For example, with the way supply chains are right now, how much leverage do transportation/logistics workers have to force a change?

Strikes are illegal in many industries. So, literally, the answer is yes

Re: Worker pay isn’t keeping up with inflation

#169

Post by cycomanic »

onion2k wrote: post #67
AnthonyMouse wrote: post #54

Earlier quoted context omitted.

> If you want a raise the best thing you can do is find a new job. Note that this doesn't always even involve taking it. Go get a job offer that pays better and bring it to your boss. If they want to match it, great. If they don't, bye.

From the other side, whenever a member of my team has come to me asking to match an offer I've always refused and wished them well in their new role. If someone is unhappy enough to start job hunting rather than talking to me then it's a clear sign that they'll leave soon regardless of any pay rise. Psychologically, every pay increase makes someone happy for a short time, and then they get used to it and they start t…

Let me ask you this from a different perspective. If you are responsible for purchasing, will you ask competitors for quotes? And use those quotes for negotiating your current contract with a supplier? Isn't what the employee is doing exactly the same thing?

If you would be a supplier you stance would translate to, I never make a new offer if a customer comes with a better offer from a competitor. I suspect one would loose a lot of customers this way.

Re: Worker pay isn’t keeping up with inflation

#170

Post by chalst »

snuxoll wrote: post #134
baron816 wrote: post #96

Earlier quoted context omitted.

> I am not an economist Yeah, if you’re interested in this stuff, you should do some research. The Fed’s options aren’t 0% rates vs 15% rates. It’s going to raise rates .25% at a time. .25% is not much of a difference. It’ll move slowly and act cautiously. The Fed, and other central banks have dealt with inflation many times before. And very effectively at that. Stocks could fall, but the stock market is not the econ…

> and the Fed has no mandate to prop up stocks. Not true in the least anymore - retirement savings for a large percentage of our population are tied up in stocks thanks to the death of the pension. Asset and securities prices as a whole are a large concern for the fed when changing policy, as a result.

The Fed has a dual mandate: price stability and maximal sustainable employment. Nothing about supporting the value of investments.

https://www.chicagofed.org/research/dual-mandate/dual-mandat...

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