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The labor shortage is the catalyst for sustained inflation

warrenbisch.medium.com

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Re: The labor shortage is the catalyst for sustained inflation

#31

Post by reccanti »

wobbly_bush wrote: post #23
Tarsul wrote: post #19

as always the real elephant in the room is that inflation is not bad per se, except for those whose wages don't grow as much as the inflation. And wages for low earners will rise. Thus, we are not really talking about inflation but more concretely about redistribution of wealth, only this time the low earners are getting more from the pie. Not the ones with the capital or the ones who don't work (anymore). As for Ame…

> Thus, we are not really talking about inflation but more concretely about redistribution of wealth, only this time the low earners are getting more from the pie. Can you elaborate on how it is redistribution of wealth for low earners? Genuinely curious.

A labor shortage = an increased demand for labor. If that labor can’t be purchased at the current market rate, then they’ll need to spend more on labor (increase wages), which in theory would come out of the salaries and benefits of the higher ups.

We’ll see if that actually happens though. Articles like this are designed to stir up fears of inflation so that they can get people on board with policies to keep wages lower.

EDIT: Saw the author’s reply higher up. It sounds like this isn’t their intent, but when the sound bite is “higher wages means more inflation”, it collectively feeds into the “be afraid of inflation” narrative that’s been building

Re: The labor shortage is the catalyst for sustained inflation

#32

Post by vvarren »

handrous wrote: post #26
wolverine876 wrote: post #20

I don't know this author, but the arguments that increasing wages will cause inflation, independent of their economic accuracy, are also perfectly tuned messaging for a specific group, the owners of businesses (and the high-level managers). That could be coincidence, but if the beneficiaries are paying attention - and that group is very sophisticated politically - it's probably not. Openly opposing wage increases for…

> I don't know this author, but the arguments that increasing wages will cause inflation, independent of their economic accuracy, are also perfectly tuned messaging for a specific group, the owners of businesses (and the high-level managers). That could be coincidence, but if the beneficiaries are paying attention - and that group is very sophisticated politically - it's probably not. The narrative slants aren't even…

I am the author and I appreciate your feedback. I actually wrote this piece to push back against the popular opinion that there’s a labor shortage due to “lazy people on unemployment benefits”. I don’t view asset prices skyrocketing as a healthy sign of the economy booming, instead I view it as all the rich people shielding themselves before inflation sets hold. And my argument hinges on working class people being unfairly priced out of their communities due to the skyrocketing asset prices. I also make an argument against the Airbnbification of real estate and how it is hurting the majority. I apologize if it seems that I am supporting the capital-owning class but it is actually the opposite. Let me know if you have any suggestions to clear this up on my article. (Edit) thanks for the edit that clears it up. I was worried you thought I was pushing a narrative when I’m actually pushing back against the narrative. Cheers!

Re: The labor shortage is the catalyst for sustained inflation

#33

Post by zz865 »

wolverine876 wrote: post #20

I don't know this author, but the arguments that increasing wages will cause inflation, independent of their economic accuracy, are also perfectly tuned messaging for a specific group, the owners of businesses (and the high-level managers). That could be coincidence, but if the beneficiaries are paying attention - and that group is very sophisticated politically - it's probably not. Openly opposing wage increases for…

Maybe but most of the ruling class is more scared of deflation than inflation. Most of the last few years we've been fighting to avoid a deflationary spiral like the 30s. Any coming sustained inflation is a good thing.

Re: The labor shortage is the catalyst for sustained inflation

#34

Post by nickff »

vvarren wrote: post #32
handrous wrote: post #26

Earlier quoted context omitted.

> I don't know this author, but the arguments that increasing wages will cause inflation, independent of their economic accuracy, are also perfectly tuned messaging for a specific group, the owners of businesses (and the high-level managers). That could be coincidence, but if the beneficiaries are paying attention - and that group is very sophisticated politically - it's probably not. The narrative slants aren't even…

I am the author and I appreciate your feedback. I actually wrote this piece to push back against the popular opinion that there’s a labor shortage due to “lazy people on unemployment benefits”. I don’t view asset prices skyrocketing as a healthy sign of the economy booming, instead I view it as all the rich people shielding themselves before inflation sets hold. And my argument hinges on working class people being un…

This comment makes it seem like you're using extremely motivated reasoning, and that any conclusions cannot be trusted.

Re: The labor shortage is the catalyst for sustained inflation

#35

Post by arduinomancer »

> With the rise of AirBnB, however, houses became valued based on the income-generating-potential of the house, favoring investors while shunning regular homeowners.

Highly doubt AirBnB is a big contributing factor to housing prices.

Rentals? Sure.

But considering travel (the use case for AirBnB) has been locked down and housing prices continued to soar makes this pretty dubious.

And tons of condo buildings don't even allow you to use the unit for AirBnB anyway.

Re: The labor shortage is the catalyst for sustained inflation

#36

Post by novok »

vvarren wrote: post #32
handrous wrote: post #26

Earlier quoted context omitted.

> I don't know this author, but the arguments that increasing wages will cause inflation, independent of their economic accuracy, are also perfectly tuned messaging for a specific group, the owners of businesses (and the high-level managers). That could be coincidence, but if the beneficiaries are paying attention - and that group is very sophisticated politically - it's probably not. The narrative slants aren't even…

I am the author and I appreciate your feedback. I actually wrote this piece to push back against the popular opinion that there’s a labor shortage due to “lazy people on unemployment benefits”. I don’t view asset prices skyrocketing as a healthy sign of the economy booming, instead I view it as all the rich people shielding themselves before inflation sets hold. And my argument hinges on working class people being un…

People like to hand wave airbnb as a boogeyman for real estate demand increases, but when you dive into actual numbers you find out it's less than %1 of units in the vast majority of cases. And buying houses to rent them out as 'revenue properties' has been around for a very long time, similar with airbnb style services in the 1800s.

If a %1 demand increase causes big price distortions in a RE market, you have much bigger problems in your city than airbnb, which is usually linked to supply control via restrictive and often corrupt planning boards putting up large barriers that you have to 'pay to win' to get past under the table, as has been shown recently in SF.

Re: The labor shortage is the catalyst for sustained inflation

#37

Post by verall »

wolverine876 wrote: post #20

I don't know this author, but the arguments that increasing wages will cause inflation, independent of their economic accuracy, are also perfectly tuned messaging for a specific group, the owners of businesses (and the high-level managers). That could be coincidence, but if the beneficiaries are paying attention - and that group is very sophisticated politically - it's probably not. Openly opposing wage increases for…

I agree with everything you said, but I don't think they just need to stoke fear, and I don't think the . Those white-collar workers and retirees want their maids and caretakers, their kids watched, their groceries bagged. And they want it cheap. Rising wages mean a direct increase in costs for this middle class.

They want to say they don't want to pay their maids more without saying that their maids don't deserve more money.

Re: The labor shortage is the catalyst for sustained inflation

#38

Post by xienze »

wolverine876 wrote: post #20

I don't know this author, but the arguments that increasing wages will cause inflation, independent of their economic accuracy, are also perfectly tuned messaging for a specific group, the owners of businesses (and the high-level managers). That could be coincidence, but if the beneficiaries are paying attention - and that group is very sophisticated politically - it's probably not. Openly opposing wage increases for…

> Imagine if they said, 'SV company pricing is causing inflation' or 'wages in SV are causing inflation'.

Not sure I follow where you’re going with this — are you suggesting SV salaries aren’t causing inflation in the local area? They absolutely have kicked off an inflationary feedback loop in SV real estate.

* Pay tech workers more to attract them to SV.

* Housing prices rise.

* Pay tech workers more to compensate for higher real estate prices.

* Repeat.

Suddenly you find yourself in a situation where $400k in total compensation for a single FAANG employee isn’t out of the ordinary. Great for them, terrible for everyone making normal amounts of money — houses cost $1M+.

Re: The labor shortage is the catalyst for sustained inflation

#39

Post by ZoomerCretin »

xienze wrote: post #38
wolverine876 wrote: post #20

I don't know this author, but the arguments that increasing wages will cause inflation, independent of their economic accuracy, are also perfectly tuned messaging for a specific group, the owners of businesses (and the high-level managers). That could be coincidence, but if the beneficiaries are paying attention - and that group is very sophisticated politically - it's probably not. Openly opposing wage increases for…

> Imagine if they said, 'SV company pricing is causing inflation' or 'wages in SV are causing inflation'. Not sure I follow where you’re going with this — are you suggesting SV salaries aren’t causing inflation in the local area? They absolutely have kicked off an inflationary feedback loop in SV real estate. * Pay tech workers more to attract them to SV. * Housing prices rise. * Pay tech workers more to compensate f…

The only problem with the SV real estate market is the segregationist-era zoning policies preventing the market from sorting out the self-inflicted shortage.

Re: The labor shortage is the catalyst for sustained inflation

#40

Post by jdavis703 »

miketery wrote: post #9
jdavis703 wrote: post #5

Earlier quoted context omitted.

Exactly, we’re already seeing this. Lots of restaurants are cutting back on front of house staff and replacing them with QR codes, cellphones and iPad kiosks.

QR codes and having a phone for menu is a brutal experience. Personally I go to a restaurant to have face time with people, the phone (or tablet) is a wrench in that, and not worth it. I’ll pay a premium to not use an electronic interface. Edit: it does make sense for fast food, especially mobile ordering (I salute the McDonald’s UI/UX(though recent updates are making it worse.. typical))

How is staring at the phone for 2 minutes different than staring at a menu for 2 minutes? At least in my circle the phones go away afterwards.
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