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I don't really hear anyone talking about this often, but is it possible that there is systemic deflation across the economy as a result of efficiencies and pric
by omarforgotpwd 9y ago
I don't really hear anyone talking about this often, but is it possible that there is systemic deflation across the economy as a result of efficiencies and prices falling in the digital age? As companies get squeezed on price due to more efficient competitors and high tech alternatives to their products, they have less money to pass onto workers. When profits are fat, companies can afford to pay workers a lot.
This would explain why the inflation rate has been much lower than some people (like the Federal Reserve) had expected.
- mdorazio 9y agoUnfortunately, this isn't the case. Corporate profits have been hitting record highs for years now [1]. Companies simply aren't passing along these profits to their workers. [1] http://www.businessinsider.com/corporate-profits-hit-new-record-high-2012-11 http://www.businessinsider.com/corporate-profits-hit-new-rec...
- a_imho 9y agoCompanies simply aren't passing along these profits to their workers. Best tldr
- slyfocks 9y agoProfits are indeed fat, though (corporate profit-to-GNP ratio is at an all-time high) [1]. Also, there’s no reason to believe corporations would raise wages simply because profit has increased. This holds true especially if labor hasn’t been the impetus for increased profit (I’d argue that efficiency gains due to technology and an increasingly oligopolistic market have led to increased profit for large corporations in the U.S.). [1] http://static3.businessinsider.com/image/531764dbecad04011139bd96-538/jesse-felder-chart.png http://static3.businessinsider.com/image/531764dbecad0401113...