What Democrats don't understand is that wage growth doesn't make inflation better. Wage growth is something that every working American deserves, regardless of inflation. Wage growth should be happening even if inflation is literally zero.
My point is that wage growth does NOT make inflation OK, and Democrats need to stop claiming that it does. It just comes across as so incredibly tone-deaf.
You understand right that wage growth contributes to inflation. Perhaps Dens should have fought hard to keep wages down, and this limited inflation, and this been more popular.
Only without a strong regulatory environment. If corporations try to raise prices, the government should actively work to increase the supply of the products so prices will go back down. This should be a fundamental tenet of DemocratsтАЩ economic policy.
It could be partly why. I received three market adjustment raises from my employer during Covid and now I make nearly 50% more in five years. (Plus a promotion and annual raises, I did some things.) I would argue the lack of workers due to Covid preceded inflation, which drove up wages and was a contributing factor to inflation. It didnтАЩt cause it but it kept it going bc shopping habits didnтАЩt change in a meaningful enough ways.
Not to sound like a rich turd bc IтАЩm not, but my parents own a lake spot in Northern MN, where the locals have turned hardcore Republican. Our lake city of 300 people is a little more cosmopolitan and just opened a new bourbon and wine bar. The economics of that city have become silly. I can get lunch at a fast food place one town over that now pays $15+ an hour to their employees. Then, drink $13 Old Fashions at the new bar in the afternoon, followed by dinner across the street at the local bar and grill where they have to get temporary visa workers for the summer bc no one else wants to work there. One more stop for a nightcap or four at the VFW where the locals will call you out for being a city person. A final drive back to the lake spot where we go past the local movie theater thatтАЩs now closed bc they couldnтАЩt find enough workers after Covid.
I sound inconsequential with so much anecdotal evidence but thatтАЩs kind of the point. I saw what I saw. And, so did they.
I donтАЩt make any of those numbers. My middle class ass got lifted up bc people at McDonalds now make $15 an hour starting bc covid caused worker shortages which drove up wages to attract workers.
Then, it makes sense that higher wages kept inflation in place bc the most likely people to have felt those higher wages are also the most likely people to spend that money on basic needs. You give a millionaire a pay raise and what do they do with it? Create a trust fund. Give me a raise and what did I do? Give it back to the economy.
even "historic" wage gains of 10-15% mean the people on the bottom are making $16.75 instead of $15..... meanwhile rent is up 200 bucks as month as are groceries...
Dems REALLY NEED to get it through their heads. Life for the bottom 30% is absurdly expensive and increasingly miserable...
Of course, actual out of pocket housing costs went up more for renters than for existing owner occupants, and OER increases for owner occupants were accompanied by massive increases in home equity. Renters are more likely to be working class than middle class. Working class folks are also more likely to have to pay for car repairs or rideshare or another used car at the bottom of the market where prices went up the most. Experience of inflation differs, so just because we usually use a common deflator for all incomes, and nominal incomes rose more as a percentage for the 40th percentile than the 80th (I assume) doesnтАЩt necessarily mean real incomes actually rose more for lower incomes when comparing the actual disparate baskets of goods purchased at the various income levels.
The wage growth was real - and in fact it was bigger for the working class than the middle class for quite a while now.
As for going forward - well its not our problem anymore. We get to sit back and say - "why havent you fixed this yet".
What Democrats don't understand is that wage growth doesn't make inflation better. Wage growth is something that every working American deserves, regardless of inflation. Wage growth should be happening even if inflation is literally zero.
My point is that wage growth does NOT make inflation OK, and Democrats need to stop claiming that it does. It just comes across as so incredibly tone-deaf.
You understand right that wage growth contributes to inflation. Perhaps Dens should have fought hard to keep wages down, and this limited inflation, and this been more popular.
Only without a strong regulatory environment. If corporations try to raise prices, the government should actively work to increase the supply of the products so prices will go back down. This should be a fundamental tenet of DemocratsтАЩ economic policy.
A temporary price freeze is also an option. But I realize that what was good enough for Richard Nixon is heresy today.
I mean Harris ran on a ban on price gouging.
This inflation wasn't caused by excess wage growth. Wage growth followed inflation.
It is both a cause and effect. People make more money and pump it back into the economy, which causes prices to rise.
It could be partly why. I received three market adjustment raises from my employer during Covid and now I make nearly 50% more in five years. (Plus a promotion and annual raises, I did some things.) I would argue the lack of workers due to Covid preceded inflation, which drove up wages and was a contributing factor to inflation. It didnтАЩt cause it but it kept it going bc shopping habits didnтАЩt change in a meaningful enough ways.
Not to sound like a rich turd bc IтАЩm not, but my parents own a lake spot in Northern MN, where the locals have turned hardcore Republican. Our lake city of 300 people is a little more cosmopolitan and just opened a new bourbon and wine bar. The economics of that city have become silly. I can get lunch at a fast food place one town over that now pays $15+ an hour to their employees. Then, drink $13 Old Fashions at the new bar in the afternoon, followed by dinner across the street at the local bar and grill where they have to get temporary visa workers for the summer bc no one else wants to work there. One more stop for a nightcap or four at the VFW where the locals will call you out for being a city person. A final drive back to the lake spot where we go past the local movie theater thatтАЩs now closed bc they couldnтАЩt find enough workers after Covid.
I sound inconsequential with so much anecdotal evidence but thatтАЩs kind of the point. I saw what I saw. And, so did they.
Now understand that people making $7.25-$15.00/hour got little to NO market adjustments, no promotions, no bonuses and no raises.
Yes, the people making 60, 70 80k/yr with careers and assets are doing amazing. The bottom 30% is getting destroyed.
I donтАЩt make any of those numbers. My middle class ass got lifted up bc people at McDonalds now make $15 an hour starting bc covid caused worker shortages which drove up wages to attract workers.
Then, it makes sense that higher wages kept inflation in place bc the most likely people to have felt those higher wages are also the most likely people to spend that money on basic needs. You give a millionaire a pay raise and what do they do with it? Create a trust fund. Give me a raise and what did I do? Give it back to the economy.
even "historic" wage gains of 10-15% mean the people on the bottom are making $16.75 instead of $15..... meanwhile rent is up 200 bucks as month as are groceries...
Dems REALLY NEED to get it through their heads. Life for the bottom 30% is absurdly expensive and increasingly miserable...
Of course, actual out of pocket housing costs went up more for renters than for existing owner occupants, and OER increases for owner occupants were accompanied by massive increases in home equity. Renters are more likely to be working class than middle class. Working class folks are also more likely to have to pay for car repairs or rideshare or another used car at the bottom of the market where prices went up the most. Experience of inflation differs, so just because we usually use a common deflator for all incomes, and nominal incomes rose more as a percentage for the 40th percentile than the 80th (I assume) doesnтАЩt necessarily mean real incomes actually rose more for lower incomes when comparing the actual disparate baskets of goods purchased at the various income levels.