Wages, Inflation, the Fed, and my sad takeaway

[Anonymous]

Anonymous wrote:For years American workers saw no wage increases. Finally that trend turned around and workers started to see wage growth but then inflation kicked in due to Covid, the pandemic backlog of shipping containers, the war in Ukraine, and stimulus packages. The Fed then increases rates to tap down inflation, which causes businesses to start having layoffs. The Fed can’t have inflation and solves to by having businesses lay off workers. The Fed can’t have everyone working because of inflation. There must be unemployed or underemployed people. Wage growth can’t happen too much or else inflation happens. My takeaway is there has to be a underclass in order for our system to work.

This is old macroeconomic theory called NAIRU non accelerating inflation rate of unemployment or something like that.
This was debunked by the reality of what was happening in the late 90s where we had low inflation and unemployment below the assumed NAIRU level of 6%.
Eventually this turned into deflation for a bit, when the Fed was not putting enough money supply to keep pace with the growing economy.

[Anonymous]

Anonymous wrote:If Republicans get their way and pass the 30% consumer tax to eliminate income tax, things will get a lot uglier for the working class. Because, it's not just 30% - there will be rate hikes on top of that to cover medicare and social security. Meanwhile, businesses are tax exempt, meaning workers will pay ALL of it.

Business owners and the rich, meanwhile, will set up shell companies, and will buy their real estate, their boats, planes, vehicles and everyday goods through the company, and will avoid all of the taxation. And, there will be nobody to go after them for it, because their plan is "so simple that we can eliminate the IRS."

A large portion of Americans don’t pay income taxes and it’s unsustainable. Eventually the lower classes will be expected to chip in and a VAT will accomplish that.

[Anonymous]

Lol

[Anonymous]

Your take away is stupid, OP.

What good are rising wages if it causes runaway inflation that ends up making everyone worse off? You conflate wage gains with *real earnings*. The Fed is much more concerned with the latter. Peoples' real earnings have been negative over the last year or two, because inflation as been rising more rapidly than wage growth, resulting in negative real earnings. The Fed is vastly concerned about the deterioration of real earnings for American workers, not nominal wage growth.

Yes, it is entirely possible for the labor market to be too tight. Wages need to come down to reach a more appropriate equilibrium to tamp down on inflation and improve real earnings growth for workers. Stop confusing wages for real earnings for starters. Here, let me help you with understanding the basics for starters (this is the data the fed is very concerned about):

https://www.bls.gov/news.release/realer.nr0.htm

[Anonymous]

Capitalism only works with a permanent underclass

[Anonymous]

Anonymous wrote:Capitalism only works with a permanent underclass

Robots.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For years American workers saw no wage increases. Finally that trend turned around and workers started to see wage growth but then inflation kicked in due to Covid, the pandemic backlog of shipping containers, the war in Ukraine, and stimulus packages. The Fed then increases rates to tap down inflation, which causes businesses to start having layoffs. The Fed can’t have inflation and solves to by having businesses lay off workers. The Fed can’t have everyone working because of inflation. There must be unemployed or underemployed people. Wage growth can’t happen too much or else inflation happens. My takeaway is there has to be a underclass in order for our system to work.

Importing people to beg on the streets isn’t good policy either. Woman outside Giant yesterday near a ‘help wanted’ sign, with her own sign begging for money, her child playing on the railings next to her. I pointed to the sign and said “they are hiring”.

How can we have a consumer-based economy without more consumers? The largest generation (Boomers) are entering retirement, which is when consuming largely ends. Our demographics aren’t good economically, which we solve with immigration.

Or incentivize more leave for childbirth, subsidized childcare etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If Republicans get their way and pass the 30% consumer tax to eliminate income tax, things will get a lot uglier for the working class. Because, it's not just 30% - there will be rate hikes on top of that to cover medicare and social security. Meanwhile, businesses are tax exempt, meaning workers will pay ALL of it.

Business owners and the rich, meanwhile, will set up shell companies, and will buy their real estate, their boats, planes, vehicles and everyday goods through the company, and will avoid all of the taxation. And, there will be nobody to go after them for it, because their plan is "so simple that we can eliminate the IRS."

A large portion of Americans don’t pay income taxes and it’s unsustainable. Eventually the lower classes will be expected to chip in and a VAT will accomplish that.

Ugh, no.

With the Republican consumer tax, businesses remain tax exempt, and what will happen is that the rich will start making all of their purchases through their companies and pay no taxes, leaving the poor and middle class saddled with all of it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For years American workers saw no wage increases. Finally that trend turned around and workers started to see wage growth but then inflation kicked in due to Covid, the pandemic backlog of shipping containers, the war in Ukraine, and stimulus packages. The Fed then increases rates to tap down inflation, which causes businesses to start having layoffs. The Fed can’t have inflation and solves to by having businesses lay off workers. The Fed can’t have everyone working because of inflation. There must be unemployed or underemployed people. Wage growth can’t happen too much or else inflation happens. My takeaway is there has to be a underclass in order for our system to work.

Importing people to beg on the streets isn’t good policy either. Woman outside Giant yesterday near a ‘help wanted’ sign, with her own sign begging for money, her child playing on the railings next to her. I pointed to the sign and said “they are hiring”.

Hope they pay enough for her to afford child care in addition to her other expenses.

Weird that Republicans expect everyone to be in the workforce yet do not support childcare.

I don't think they actually want women working, do you? They want us home raising babies.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For years American workers saw no wage increases. Finally that trend turned around and workers started to see wage growth but then inflation kicked in due to Covid, the pandemic backlog of shipping containers, the war in Ukraine, and stimulus packages. The Fed then increases rates to tap down inflation, which causes businesses to start having layoffs. The Fed can’t have inflation and solves to by having businesses lay off workers. The Fed can’t have everyone working because of inflation. There must be unemployed or underemployed people. Wage growth can’t happen too much or else inflation happens. My takeaway is there has to be a underclass in order for our system to work.

Importing people to beg on the streets isn’t good policy either. Woman outside Giant yesterday near a ‘help wanted’ sign, with her own sign begging for money, her child playing on the railings next to her. I pointed to the sign and said “they are hiring”.

Hope they pay enough for her to afford child care in addition to her other expenses.

Weird that Republicans expect everyone to be in the workforce yet do not support childcare.

I don't think they actually want women working, do you? They want us home raising babies.

Yet they don't want to pay the husband enough to afford to keep her home raising babies.

Republicans even suck at being sucky.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For years American workers saw no wage increases. Finally that trend turned around and workers started to see wage growth but then inflation kicked in due to Covid, the pandemic backlog of shipping containers, the war in Ukraine, and stimulus packages. The Fed then increases rates to tap down inflation, which causes businesses to start having layoffs. The Fed can’t have inflation and solves to by having businesses lay off workers. The Fed can’t have everyone working because of inflation. There must be unemployed or underemployed people. Wage growth can’t happen too much or else inflation happens. My takeaway is there has to be a underclass in order for our system to work.

Importing people to beg on the streets isn’t good policy either. Woman outside Giant yesterday near a ‘help wanted’ sign, with her own sign begging for money, her child playing on the railings next to her. I pointed to the sign and said “they are hiring”.

Hope they pay enough for her to afford child care in addition to her other expenses.

Weird that Republicans expect everyone to be in the workforce yet do not support childcare.

I don't think they actually want women working, do you? They want us home raising babies.

Yet they don't want to pay the husband enough to afford to keep her home raising babies.

Republicans even suck at being sucky.

No, my R male co worker explained that if NO family had a working wife, then costs for things like a nice home would go down to where guys like him - a single provider for his family - could afford it.

In other words, my husband had an unfair advantage over him because I work. Dual income for some means all must pursue dual income, to the detriment of the family.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For years American workers saw no wage increases. Finally that trend turned around and workers started to see wage growth but then inflation kicked in due to Covid, the pandemic backlog of shipping containers, the war in Ukraine, and stimulus packages. The Fed then increases rates to tap down inflation, which causes businesses to start having layoffs. The Fed can’t have inflation and solves to by having businesses lay off workers. The Fed can’t have everyone working because of inflation. There must be unemployed or underemployed people. Wage growth can’t happen too much or else inflation happens. My takeaway is there has to be a underclass in order for our system to work.

Importing people to beg on the streets isn’t good policy either. Woman outside Giant yesterday near a ‘help wanted’ sign, with her own sign begging for money, her child playing on the railings next to her. I pointed to the sign and said “they are hiring”.

Hope they pay enough for her to afford child care in addition to her other expenses.

Weird that Republicans expect everyone to be in the workforce yet do not support childcare.

I don't think they actually want women working, do you? They want us home raising babies.

Yet they don't want to pay the husband enough to afford to keep her home raising babies.

Republicans even suck at being sucky.

No, my R male co worker explained that if NO family had a working wife, then costs for things like a nice home would go down to where guys like him - a single provider for his family - could afford it.

In other words, my husband had an unfair advantage over him because I work. Dual income for some means all must pursue dual income, to the detriment of the family.

Two income trap, written by Elizabeth Warren!

[Anonymous]

The real problem is the bible belt. They will just keep on supporting the "moral majority" / Fallwell.

[Anonymous]

Anonymous wrote:For years American workers saw no wage increases. Finally that trend turned around and workers started to see wage growth but then inflation kicked in due to Covid, the pandemic backlog of shipping containers, the war in Ukraine, and stimulus packages. The Fed then increases rates to tap down inflation, which causes businesses to start having layoffs. The Fed can’t have inflation and solves to by having businesses lay off workers. The Fed can’t have everyone working because of inflation. There must be unemployed or underemployed people. Wage growth can’t happen too much or else inflation happens. My takeaway is there has to be a underclass in order for our system to work.

Yeah, we have had low inflation for 30 years and flat wages for 30 years. Likely by design.

https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

[Anonymous]

Anonymous wrote:

Anonymous wrote:Capitalism only works with a permanent underclass

Robots.

Exactly. You choose your poison - tons of taxes for all or underclass pays all. There's nothing that makes it good for everyone when money is concerned. Some will have it and some won't. That's just how money works.