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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

#341

Post by gizmo »

Gareth321 wrote: post #250

Real wages have been flat since the 1970s ( https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... ). "Okay, so people's living standards are about the same since 1970?" Not even close. The problem with inflation is that its calculation is fraught with all kinds of selective weighting, bias, and politics. Take a look at the relative differences between the things which have decreased and increased in cost in…

You state govt keeps inflation low by manipulating how it's calculated in order to keep the fed rate low, which insidiously keeps stocks up. And this happens, apparently, because the Fed really cares about news headlines? Does the ECB and BOJ enact the exact same policy but for unrelated (but equally conspiratorial) reasons? Are all the central banks and politicians around the world in cohorts, or is there something else going on here?

Long term interest rates have been going down for decades. This is a long term trend, caused by low GDP growth expectations. The labor force participation rate keeps trending down. Healthcare costs keep trending up. Population is aging. These are fundamental problems for which there is no great solution, and interest rates are low (along the curve) as a consequence. The Fed is ultimately only a minor player in this. They can provide excess liquidity, but only for so long. Ultimately rising inflation forces the Fed to withdraw liquidity and the market will inevitably deflate. Fed policy postponed a market crash by a couple of years so it wouldn't hit at the same time as covid, and that's a good thing.

But who benefits from a steady stock market? Regular people. Pension funds. Who benefits from crashes and wild gyrations? The wealthy. Hedge funds. This makes perfect sense, because a treacherous market is best navigated by the most experienced and wealthiest parties.

You seem to argue the opposite: that a market that has steadily gone up and up and up because of Fed/inflation manipulation has somehow benefited the wealthy elites at the expense of regular people?

Yes, workers get paid too little and much in the world is unfair. But your analysis is mostly conspiratorial silliness. I don't know what you mean by "ridiculous race war", but Black people in the US are 20x poorer (by net worth, on average) compared to whites so a race/color blind analysis of the economy doesn't work.

Re: Worker pay isn’t keeping up with inflation

#342

Post by WalterBright »

Inflation is how the government spends money without getting it via taxes. The higher prices everyone pays is how we pay for that government spending.

The only way this can work is if wages, salaries, etc., don't keep up with inflation.

None of that government spending everyone loves comes for free.

Re: Worker pay isn’t keeping up with inflation

#343

Post by LatteLazy »

random_upvoter wrote: post #236
LatteLazy wrote: post #100

This will be unpopular... If you want to make good pay, you have to make it happen. You have to change jobs occasionally (every 2 years). You have to suck up a bit to managers. You have to be at least average at your job. You have to manage your CV. And you have to negotiate. I'm not saying this is right or fair or nice. I'm just saying the vast majority of people I've worked with don't do any of those things (except…

Well you bought into the myth of competition and you have done well in your particular segment of the economy, good for you. But most jobs in this world are just not challenging. Most of the meaningful work in this world is not particularly challenging or competitive, it just needs to be done. Rooms need to be vacuumed, children need to be washed and trucks need to be driven from A to B. So your message to the people…

To be clear, I never said no one should be a cleaner and I didn't say the way for a cleaner to do better is to worker harder.

Quite the opposite: cleaners don't make much money. But managers do. So if you're a cleaner and you want more money, have a plan to become a manager. Move companies to somewhere that pays better. Start your own cleaning company. Just don't spend 40 years cleaning, never ask for raise, never change jobs, work for minimum wage and wonder why you never became a millionaire...

Of course, if you're content being a cleaner then good luck to you! Just don't say "capitalism cheated me" when you got exactly what you said you were content with...

Re: Worker pay isn’t keeping up with inflation

#344

Post by antocv »

OtomotO wrote: post #93
dnautics wrote: post #39

If it does, inflation has failed as a policy: https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi... "in the long run, it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sus…

Great, now you have a job. You can't live with the pay, but at least you have a job. That is something, right? Spoiler: it's not

Sure it is something, it keeps you busy from making revolution.

Re: Worker pay isn’t keeping up with inflation

#345

Post by black_13 »

BiteCode_dev wrote: post #332
dan-robertson wrote: post #276

Earlier quoted context omitted.

> most Americans are significantly worse off since the 1970s I think this is obviously false and hurts the credibility of the rest of this comment. There are many pitfalls with measuring long-term inflation. How much did an internet connection cost in the 1970s? What about a computer? What about a smartphone? These modern technologies make peoples lives much better and were somewhere between impossible and impossibly…

You can't eat a smartphone, you can't sleep in an internet connection, you can't do your nursing job through a computer. Formal education is more expensive. A balanced diet is harder to get, and more expensive. Housing is more expensive near your work. But gas as well if you live far from it. Today's people debt is higher, and you can't easily work one job, raise a family, and afford education plus buy a home. It was…

My mother supported us with a blue collar job and I was able to attend college in the 80s on grants. None of that could happen now. Its worse now. And the lack of opportunity is a dangerous to our democracy. I see parallels between this period and Weimar Germany.

Re: Worker pay isn’t keeping up with inflation

#346

Post by beeboop »

chii wrote: post #235
bjourne wrote: post #48

Earlier quoted context omitted.

That's a good thing. But it would have been better if wages kept up with productivity growth too, which they haven't.

the productivity growth required capital investments (either as upfront research/development, or as capital expenditure on plant and equipment). The owners of this capital require a return on such an investment, and thus, they get first dibs on the excess productivity (aka, profit).

Capital they "created" off the backs of workers

Re: Worker pay isn’t keeping up with inflation

#347

Post by chalst »

thow-58d4e8b wrote: post #243
chalst wrote: post #170

Earlier quoted context omitted.

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...

FED actually has three mandates, one of them almost never mentioned: * employment * price level * moderate long term interest rates

The requirement to pursue moderate long-term interest rates is usually seen as part of price stability, since the level of long-term interest rates is determined by inflation expectations.

Cf. https://www.federalreserve.gov/faqs/what-economic-goals-does...

Re: Worker pay isn’t keeping up with inflation

#348

Post by nickpp »

oblio wrote: post #299
nickpp wrote: post #295

Earlier quoted context omitted.

Things with massive government involvement and heavily regulated like are incredibly more expensive: health care, housing and education. Meanwhile, things provided by the free market have become incredibly less expensive and more powerful: technology, communication, entertainment. Nothing to do with your rich vs poor class wars.

You're completely right. Yet in 99% of your peers, OECD countries, those regulated domains are generally more regulated, not less. And we're talking about 40 countries or so, many as diverse as the US, big enough to be comparable. How do these data point for into your narrative?

I believe that those regulated domains are generally much more expensive in all those countries, no?

Re: Worker pay isn’t keeping up with inflation

#349

Post by JohnWhigham »

holografix wrote: post #137
silisili wrote: post #58

As someone who does OK, but lives in reality (not the bay area), I feel a revolution coming. I hope it's not a violent one, but who knows at this point. Hopefully it's just a politician with big policy changes. People feel completely disenfranchised. You keep hanging housing over their head but just out of reach like some baby toy, then inflation spikes everything else. What's the point of working even? I don't know…

It already came and half went. It was represented by Donald Trump, the rise of the right in Europe and the alignment of Russia and China for short term push back on the west. DT would never have been elected if _any_ of the architects of the GFC had gone to jail. Imho that was Obama’s biggest mistake. Bailouts could be justifiable and understood by the population, no one going to jail was a betrayal. It caused a tipp…

It already came and half went.

Yup, and the worse part? Nothing changed. Trump didn't didn't do a single fucking thing of material value to ameliorate the positions of those who voted for him, or the middle class for that matter. And yet he's almost sure to win again in 2024.

I think in an astonishingly short amount of time, people in the West forgot what revolution is.

Re: Worker pay isn’t keeping up with inflation

#350

Post by vishnugupta »

namdnay wrote: post #296
toyg wrote: post #257

Earlier quoted context omitted.

> As a non-American, it's heartbreaking to see efforts to unify the underclass completely derailed by this ridiculous race war. Yeah, well, it's not like things are much better in Europe. Far-right parties are now mainstream in most major EU countries, and their n.1 priority is exactly the same. Signed, a Brexit victim.

The far-right parties in Europe are usually focused on immigration rather than race. Look at the Brexit parties in the UK, the big enemies were the Poles. And the FN/RN in France has always taken pains to show that it is "pro-black" (and anti-brown..)

> immigration rather than race.

Two sides of the same coin.

A large section of people are left out of benefits of improving economy. Lions share of the gains go to the Uber rich people. And politicians play immigration card to whip up their voter base.

More or less exact phenomenon played out in Bombay, India. Except that the immigrants were Indians from other states (Gujarat, Tamilnadu etc). But when the political party did come to power they did absolutely nothing to improve their voter base’s life. Bombay continues to be a shit hole, worse so, that it was and the city floods every monsoon like a clockwork.

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