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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

#51

Post by nickff »

vvarren wrote: post #41
nickff wrote: post #34

Earlier quoted context omitted.

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

I'll pushback against this point. I noticed that the popular discourse was all about unemployment benefits being the root cause of the labor shortage, when in reality the statistics said differently (i.e., stats from states which had ended unemployment). So I did research to find the true root causes, while I still fleshed out the counter-argument on unemployment. EDIT - also, i'm not a journalist this is just my per…

To be clear, I don't think you have any obligation to the public; it just seems like you were out to make a partisan point (and wanted to 'team-up' with the commenter you originally responded to in this thread).

Re: The labor shortage is the catalyst for sustained inflation

#52

Post by novok »

vvarren wrote: post #42
novok wrote: post #36

Earlier quoted context omitted.

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 b…

Fair point. This housing boom is largely caused by wealthy investors bidding up the price of single family homes, with AirBnb completely unrelated. There are also some urban-suburban migration dynamics at play. I mentioned AirBnb to point out that this isn't just a new issue. And while vacation rentals have always been a thing, they were formerly centered around vacation destinations. Now, they can be anywhere, and t…

Airbnb has a much higher labor component involved, while renting a unit out long term is far less. It's definitely a tradeoff.

Re: The labor shortage is the catalyst for sustained inflation

#53

Post by avidphantasm »

vvarren wrote: post #43
zz865 wrote: post #33

Earlier quoted context omitted.

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.

Absolutely. In fact, inflation may be the strategy of choice to get the US out of its debt crisis. Ruling class is totally fine with inflation, because it allows them to raise wages to $15, 20, 25, 30 per hour and act like benevolent leaders when in reality wages are just catching up to where they should be after decades of stagnation.

What debt crisis? The national “debt” is not a crisis. The US has a great degree a monetary sovereignty. As long as this is true, it will always be able to pay its “debts”. The US government spends money into existence, which is a direct subsidy to either states, citizens, the private sector, or foreign interests (in the case of USG buying imported goods).

Re: The labor shortage is the catalyst for sustained inflation

#54

Post by wolverine876 »

rufus_foreman wrote: post #47
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 Which do you think is a better approach, evaluating arguments on their merits or evaluating them on the basis of who might benefit if the arguments are valid?

I think both are essential: Evaluating arguments on their merits is obviously important, so I'll focus on the second method.

We live in a world flooded by propaganda; we are committing political and social suicide by not addressing it. One powerful method of addressing propaganda is to identified beneficiaries - the people behind it are necessarily doing it for their own benefit.

And at the same time, evaluating arguments on their merits exposes us to propaganda: First, a well-known reason: it is much easier to make up lies than to determine the truth; the propagandist can easily consume all the resources of the person looking at merits. Second, humans are significantly worse at determining merits than they imagine (says much research).

Looking at merits depends on some good faith: The person submitting the argument is trying to present a valid argument. Propaganda is built on abusing that good faith.

Re: The labor shortage is the catalyst for sustained inflation

#55

Post by wolverine876 »

zz865 wrote: post #33
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.

They also are more scared of nuclear war than inflation, but those aren't their choices. Inflation is bad creditors; the value of the debt inflates away. Also, the right wing, which seems to attract more wealthy people, has long used fear of inflation to support their ever-smaller-government campaign; they say government spending will cause inflation (when someone from the left is in office).

Re: The labor shortage is the catalyst for sustained inflation

#56

Post by wolverine876 »

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…

> Not sure I follow where you’re going with this — are you suggesting SV salaries aren’t causing inflation in the local area?

Sorry I wasn't clear. My point was that people now focused on rising wages causing inflation are typically wealthy professionals (such as in SV). I imagine a different response if someone attributed it to the wealthy people's income.

It's often: 'We need to cut their taxes so they can stimulate the economy more!'

Re: The labor shortage is the catalyst for sustained inflation

#57

Post by wolverine876 »

nickff wrote: post #51
vvarren wrote: post #41

Earlier quoted context omitted.

I'll pushback against this point. I noticed that the popular discourse was all about unemployment benefits being the root cause of the labor shortage, when in reality the statistics said differently (i.e., stats from states which had ended unemployment). So I did research to find the true root causes, while I still fleshed out the counter-argument on unemployment. EDIT - also, i'm not a journalist this is just my per…

To be clear, I don't think you have any obligation to the public; it just seems like you were out to make a partisan point (and wanted to 'team-up' with the commenter you originally responded to in this thread).

> To be clear, I don't think you have any obligation to the public

Tangentially: I know that's a norm (or almost one) but I think that they do, and that we all do. We are all responsible for our communities. Their state, good or bad, improving or not, depends completely on our actions.

Re: The labor shortage is the catalyst for sustained inflation

#58

Post by wolverine876 »

vvarren wrote: post #28
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 am the author, and my argument is in no means against rising wages. In fact, I think it’s about damn time that wages are rising. The $15/hr living wage movement has fought for this so long, that now $15/hour is barely a living wage anymore. My argument is actually that the economy is built on the backs of underpaid workers, and now that these workers are demanding their fair value we will either see inflation or th…

Thanks for a thoughtful response.

> My argument is actually that the economy is built on the backs of underpaid workers, and now that these workers are demanding their fair value we will either see inflation or the failure of many businesses.

I don't see how it's inflationary from some money to be shifted from the owners to the employees. Also, I don't see how that causes a business to fail, unless it was operating very close the margin. Corporations are doing very well; Bezos has over one hundred billion; paying employees more won't bankrupt these businesses or have any effect on people like Bezos.

Re: The labor shortage is the catalyst for sustained inflation

#59

Post by rstuart4133 »

A lot of words and reasoning in the article, but not much in the way of measurement so I went looking and found this: https://www.thebalance.com/unemployment-rate-by-year-3305506

If anything, the reverse looks to be true. High unemployment is generally accompanied by high inflation.

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