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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

#391

Post by abbassi »

Retric wrote: post #321
abbassi wrote: post #278

Earlier quoted context omitted.

Very interesting points; there is a scientific clarity in your analysis. But, I would like to add a point: the reality is that the production is in global scale now, the production has no borders, races, nationalities, but the capital has its local interests. The working class is a global class, while bourgeoisie is a local class. But since the bourgeoisie is the dominant class, it makes the working class divided. Li…

Imports are only ~15% of the US GDP, they really don’t explain wage stagnation.

I didn't mean the point is the imports. The fact is that US is loosing his share of world GDP for decades, and new powers like China are rising. It is just like the decline of British empire at the late 19th and early 20th century and rise of new powers like US, Germany, Japan. We are witnessing the same phenomenon that Lenin called unequal development of capitalism in the imperialist stage. We would also see the same tensions and wars that we saw in the first half of 20th century.

Re: Worker pay isn’t keeping up with inflation

#392

Post by nly »

sigmaprimus wrote: post #330
hvidgaard wrote: post #280

Earlier quoted context omitted.

What good is new tech if you cannot afford to buy a house or a new'ish car for the minimum wage, even if you live frugal and save?

Many people have a misguided belief that home ownership was easy in the 70s, 80s or even the 90s. Yes the prices were lower and maybe the cost/average income ratio was lower but I can attest to the fact that it was no easy feat even back then. Plenty of people lost their homes, renters had far less rights and although when looking at things through averages seems to indicate a better off middle class, the wages of th…

Of course it wasn't 'easy' to make mortgage payments back then. Mr Market always prices monthly outgoings for housing to some % of typical income.

The difference is those who managed to get on the property ladder in between the 70s and 90s saw falling rates and their LTV ratios being crushed as property prices sawed. Today many of those people live in 7 figure homes in the middle of prime city centers, or bought second properties and became landlords, intentionally or accidentally.

Young people today face the opposite. Just like stock market multiples, housing is at the highest the market can bare. Either we embrace inflation and wages rise, or interest rates rise, the market crashes, and millions upon millions of people end up underwater.

Re: Worker pay isn’t keeping up with inflation

#393

Post by abbassi »

tsimionescu wrote: post #388
Retric wrote: post #321

Earlier quoted context omitted.

Imports are only ~15% of the US GDP, they really don’t explain wage stagnation.

A lot of work is moving abroad without becoming imports. US companies own significant chunks of the services and R&D workforce the world over. Even in production, it's not uncommon for a US company to buy a factory rather than importing goods produced in that factory.

That is exactly "export of capital". We also see "import of labor force" since the developed countries struggling with demographic winter.

Re: Worker pay isn’t keeping up with inflation

#394

Post by guerrilla »

kilroy123 wrote: post #320
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…

I think they have the correct answer as to 'why' this has happened and what the root cause is: https://www.youtube.com/watch?v=1gEz__sMVaY&t=33s

Can you summarize? I don't want to watch this entire video right now even though it seems interesting.

Re: Worker pay isn’t keeping up with inflation

#395

Post by valdiorn »

bjarneh wrote: post #184

Not sure how inflation is calculated globally; but where I live (Norway) we leave housing costs out of inflation. That always seemed very strange to me. Our main cost of living, (which has gone through the roof the last 25 years) is somehow left out of the calculation. My rent, or cost of buying a house - is much more important than the cost of a Snickers bar.

In Iceland, we can't include housing in the calculation, become the vast majority of mortgages are inflation linked; meaning if inflation goes up, so does the remaining capital on your mortgage (yes, it's insane, if you want to know more there's articles online about it).

If we included housing, it would push up mortgages, which would make housing more expensive, which would drive inflation, which would push up mortgages, and so on.

Meanwhile my UK mortgage has 1.6% interest rate, and my house has gone up in value by 100k since I bought it 18 months ago, and I've just received a raise specifically to adjust for increased market rates and inflation. Life's pretty sweet here in comparison to back home. Needless to say; not going back :)

Re: Worker pay isn’t keeping up with inflation

#396

Post by mensetmanusman »

nly wrote: post #329
oDot wrote: post #313

Earlier quoted context omitted.

Yep. "Peter Schiff vs Warren Buffett; The Middle Class in the 50's, and Now" https://www.youtube.com/watch?v=byxd7dTnlXU

While Peters point of view may be seen as dated and chauvinistic, I do feel like the absolute necessity of dual income living today, especially in the city, has had a huge negative impact on quality of family life. I don't even have kids and I recognize what he's talking about. By the time me and my partner are home (7pm) and have prepped, cooked and cleaned up from dinner, there's no time or energy left to do anythi…

This is why no one is having replacement rate numbers of kids in cities.

Re: Worker pay isn’t keeping up with inflation

#397

Post by montblanc »

dan-robertson wrote: post #276
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…

> 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…

> 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.
In terms of mental health, job security, stability (e.g marriage/divorce rates) they may very well be worse off.

Re: Worker pay isn’t keeping up with inflation

#398

Post by helpfulmandrill »

passerby1 wrote: post #288
hvidgaard wrote: post #280

Earlier quoted context omitted.

What good is new tech if you cannot afford to buy a house or a new'ish car for the minimum wage, even if you live frugal and save?

Are metaverse gonna replace lack of owning a house (and travel) soon? /s

Maybe you could just live in a coffin and jack into a more spacious metaverse simulation of an apartment /s

Re: Worker pay isn’t keeping up with inflation

#399

Post by Jenk »

guerrilla wrote: post #386
Jenk wrote: post #298

Earlier quoted context omitted.

That's a country specific problem, not a Europe problem. I don't mean just Brexit for the UK, either. What does happen in Europe is far-right parties get a platform to speak on. The big continental countries have an election process that lets everyone be heard, and the far-right get heard plenty - allowing the electorate to smell their bullshit. In the UK we don't have such elections. We have a two horse race, and to…

> allowing the electorate to smell their bullshit. You need to look at the numbers. Far-right parties are growing everywhere in Europe... One is nearly the largest party in Sweden.

I mean.. as long as it's a fair election and not a campaign of lies, maybe the problem isn't the political parties and actually, people just really want the right to reign?

Re: Worker pay isn’t keeping up with inflation

#400

Post by bjarneh »

freddie_mercury wrote: post #290
bjarneh wrote: post #184

Not sure how inflation is calculated globally; but where I live (Norway) we leave housing costs out of inflation. That always seemed very strange to me. Our main cost of living, (which has gone through the roof the last 25 years) is somehow left out of the calculation. My rent, or cost of buying a house - is much more important than the cost of a Snickers bar.

Norway includes housing. Says so right on the page from Statistics Norway that says how CPI is calculated.

I stand corrected; I just assumed they were, since others do and inflation has been reported as very low for the past 20 years. It's hard to imagine that housing could be part of this calculation the way the housing market in Norway has developed in the past 25 years. I guess it's the way the house/energy is lumped into a category which is weighted low, at least in comparison to how much of our expenses it represents.

I guess the people in the US ignore it completely, we just weigh it wrong :-)

> Why aren’t house prices included in measures of inflation? Should they be?

https://www.economist.com/the-economist-explains/2021/07/29/...

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