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Only half of Americans have a 401k, and apparently only a little over half of that half use it. Savings accounts also give 0 interest, and most Americans aren’t

Only half of Americans have a 401k, and apparently only a little over half of that half use it. Savings accounts also give 0 interest, and most Americans aren’t dumping their earnings into equities. Most Americans can’t buy a home either, so no real estate investment. Wages are not correlating to inflation either, so that fact is particularly hilarious too. So, case study, Uber/Lyft fucked drivers out of employee status, thus fucking the need to offer a retirement fund. Real piece of shit companies. Hopefully those people can store their money in a 0 interest rate Savings account, or get smart and dump their entire diddly squat income into AAPL for decades (you know lock up their capital and live frugally). This stuffs gonna come back on us if we’re doing this across industries. There is no retirement, there is only social security realistically speaking for the majority. It is what it is. Gotta love the new gig economy too, those people are truly fucked. Everyone’s going to work until they die basically. We see that current retirement age generation is fixated on social security/medicare (literal single issue voters, don’t touch their retirement cash flow), but I don’t think anyone in Gen X/Millennial/Z realizes just how much more obsessed they will all be about those two funds going forward. You’ll have three generations that will literally only care about that, just like their grandparents before them. Oh, and it’s going to be three generations worth of old people that will need a massive fund to finance all of those social security checks because we fucked them out of realistically keeping up with inflation.

Barrin92 6y ago
Wages are correlated with inflation, in fact wages push inflation, given that they're the largest cost for most businesses. It's relatively hard to imagine how you'd have widespread increase in price without increase in cost of labour. As to your case study of a low wage worker, if he doesn't have any assets, inflation doesn't mean much. If he has debt, which he likely has, student debt say in the US, inflation is a good thing. The (correct) conventional wisdom is that debtors benefit from inflation and creditors don't. And if you've got money in a pension fund like many Americans, or you have index funds, or you have anything else that broadly represents the economy, cash flowing into the economy rises prices but it also appreciates assets. There really isn't any point to fear moderate inflation from the standpoint of a worker. If anything the opposite is true. I agree with the fact that gig work is terrible and lots is wrong with economic insecurity, but steady inflation isn't an issue.
- runawaybottle 6y ago
  Wages are correlated with inflation, in fact wages push inflation, given that they're the largest cost for most businesses. It's relatively hard to imagine how you'd have widespread increase in price without increase in cost of labour. I’m going to step away from the word correlation because I think it will lead us down a never ending path. Wages are not keeping pace with inflation. I’m not saying it needs to be 1:1, but businesses have managed to stunt wage growth at a much lower multiple. That is one hell of a tax on people’s wealth. So now the question is, is what I just said true? Year after year there’s tons of data and literature on how wages haven’t budged in relation to inflation. The public is constantly being shown these arguments similar to Climate change. I think ultimately the government doesn’t care that your earning power is not keeping pace because it is thematically consistent with what monetary easing is trying to do. The whole point is to not let your money sit around and appreciate, the whole point is to have your money in fight-flight mode at all times to keep the economy from stagnating. There is nothing in that policy that has anything to do with increasing your earning power or raw appreciation of your current wealth. So be it, the failure here is that if the average person’s money needs to be put to work, there has to be more vehicles available to the average person. When your typical business doesn’t even offer a 401k, when wages only grow at a 0.1-0.3x of inflation, you can’t reasonably expect someone to stow away the max 5k contribution yearly in an independent IRA. Your average worker is simply not able to do this, and this is the failure I’m mostly speaking to. Lastly, the word pension is a vestige. I worked at a large Corp that had pensions once. When I got there, there policy changed so that anyone after around the late 2000s would not receive a pension, and they would stop adding to the pension fund for those that came before. Millennial/Z will never hear the word pension again, so it’s not a fair point to make. The best current generations can do is save for a down payment on a house, and be locked financially to the mortgage payment. To have a fighting chance at this in these crazy housing markets, you need to make some sacrifices to hit that down payment. Nothing else about our system is going to help you, and all monetary policy is trying to outpace you at this point globally.

Barrin92 6y ago

Wages are correlated with inflation, in fact wages push inflation, given that they're the largest cost for most businesses. It's relatively hard to imagine how you'd have widespread increase in price without increase in cost of labour. As to your case study of a low wage worker, if he doesn't have any assets, inflation doesn't mean much. If he has debt, which he likely has, student debt say in the US, inflation is a good thing. The (correct) conventional wisdom is that debtors benefit from inflation and creditors don't. And if you've got money in a pension fund like many Americans, or you have index funds, or you have anything else that broadly represents the economy, cash flowing into the economy rises prices but it also appreciates assets. There really isn't any point to fear moderate inflation from the standpoint of a worker. If anything the opposite is true. I agree with the fact that gig work is terrible and lots is wrong with economic insecurity, but steady inflation isn't an issue.

runawaybottle 6y ago
Wages are correlated with inflation, in fact wages push inflation, given that they're the largest cost for most businesses. It's relatively hard to imagine how you'd have widespread increase in price without increase in cost of labour. I’m going to step away from the word correlation because I think it will lead us down a never ending path. Wages are not keeping pace with inflation. I’m not saying it needs to be 1:1, but businesses have managed to stunt wage growth at a much lower multiple. That is one hell of a tax on people’s wealth. So now the question is, is what I just said true? Year after year there’s tons of data and literature on how wages haven’t budged in relation to inflation. The public is constantly being shown these arguments similar to Climate change. I think ultimately the government doesn’t care that your earning power is not keeping pace because it is thematically consistent with what monetary easing is trying to do. The whole point is to not let your money sit around and appreciate, the whole point is to have your money in fight-flight mode at all times to keep the economy from stagnating. There is nothing in that policy that has anything to do with increasing your earning power or raw appreciation of your current wealth. So be it, the failure here is that if the average person’s money needs to be put to work, there has to be more vehicles available to the average person. When your typical business doesn’t even offer a 401k, when wages only grow at a 0.1-0.3x of inflation, you can’t reasonably expect someone to stow away the max 5k contribution yearly in an independent IRA. Your average worker is simply not able to do this, and this is the failure I’m mostly speaking to. Lastly, the word pension is a vestige. I worked at a large Corp that had pensions once. When I got there, there policy changed so that anyone after around the late 2000s would not receive a pension, and they would stop adding to the pension fund for those that came before. Millennial/Z will never hear the word pension again, so it’s not a fair point to make. The best current generations can do is save for a down payment on a house, and be locked financially to the mortgage payment. To have a fighting chance at this in these crazy housing markets, you need to make some sacrifices to hit that down payment. Nothing else about our system is going to help you, and all monetary policy is trying to outpace you at this point globally.