5 ms·

Thank you, this helped. It seems to me that, currently, entry-level wages are rising faster than inflation. It isn't uncommon to see retail or fast food hiring

Thank you, this helped. It seems to me that, currently, entry-level wages are rising faster than inflation. It isn't uncommon to see retail or fast food hiring signs advertising starting wages 2x as much as what I earned in those jobs 20 years ago -- over which time cumulative inflation has been 52.1%. Do you think the reduced labor participation rate due to COVID-19 has made the entry-level labor market more responsive than the Cantillion Effect presumes?

reedjosh 5y ago
I believe it's that and a much higher inflation rate than is admitted by a government that uses inflation as a hidden tax. http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts
- imtringued 5y ago
  That site is not trustworthy because they just add a constant to existing government numbers. Let's get real. Every statistic has a tracking error. The CPI will always be wrong because that is the nature of measurements. However, it's not so crappy that it is off by more than 1%. Inflation usually happens with full employment. One problem is that inflation can also drive full employment, therefore the interest rate has to act as a moderator to prevent the economy from overheating as people constantly switch jobs for better pay. Lowering the interest rate is only possible because there is slack in the economy and we haven't reached full employment. If there was full employment the Fed would have to raise the interest rate because the market demands a higher interest rate but that is not the case right now.