Reply to Inflation: explain it to me like I'm 5

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Why is everything so expensive now compared to just 3 years ago? Is it ever going to go back to how it was? I learn a lot on this board so I'm looking for genuine insight. Is it because the government put so much money into circulation during the pandemic and [b]disincentivized work[/b]? [/quote]

I'm always curious when people say this - who do you imagine is disincentivized to work? Are [i]you [/i]disincentivized? Do high prices really pair up with disincentive to work, in your mind?

We had a long run of cheap labor performed by immigrants (immigration dried up during covid) and people who were working multiple low-paying jobs. It did not take a lot of loosening in the job market -- a huge demand for blue collar workers and construction, some people dying of covid, some people getting better jobs once WFH opened them up to a broader group -- for the people working multiple service jobs to find a single job that paid the bills. That's not "nobody wants to work anymore" it's "people can do better than they were."[/quote]

OP here. I meant the government was paying out heightened unemployment benefits during the pandemic, which disincentivized work, or at least that's what I'm thinking. I didn't mean that high prices themselves disincentivize work. I was more thinking that since many lower wage earners decided to stay home and collect benefits, businesses were forced to raise wages in order to lure them back, and then were in turn forced to raise prices to cover the higher wages. Your second paragraph is some good perspective for me for the other question I had which is "Where did all the workers go?" Thanks![/quote]

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