6 ms·

what goes up first the wages or the cost of living? in the end I think they chase each others tail. someone has to pay the bill for that person getting $18hr fo

what goes up first the wages or the cost of living? in the end I think they chase each others tail. someone has to pay the bill for that person getting $18hr for flipping burgers or pulling green chain. it’s an upward spiral probably hurting those on a fixed income the worst. the paycheck will of course look and feel nice but now the trip to the grocery store will be $135 instead of $85.

bserge 5y ago
Well, in this case it's cost of living. I can only speak for some of Europe. Shit is going up in price (and it doesn't seem to be slowing down). Wages are going up, too. Ultimately a bit useless, the poorest are still more fucked by CoL than they're helped by higher wages.
- lotsofpulp 5y ago
  Only because there is insufficient wealth transfer from the top deciles and quintiles to the bottom ones. Obviously, if society retains the same conditions that allow increasing income/wealth gaps, then higher wages will not help the poorest.
cycomanic 5y ago
It's funny if investors demand 10% ROI nobody blinks an eyelid, but if if wages are go up suddenly everyone talks about inflation. Do investors returns not increase prices?
- refurb 5y ago
  ROI can go up with no impact on prices, that’s why.
- onion2k 5y ago
  If investors decided to demand 1,000,000% ROI we wouldn't suddenly have hyperinflation. Investors can 'demand' whatever they like; there's no guarantee they're going to get it, and most of the time they won't. It's just their way of exerting control over a company. When wages go up they actually go up, which, at least according to conservative economic theory, leads to inflation. In practice though it often doesn't.
  - lotsofpulp 5y ago
    > . Investors can 'demand' whatever they like; there's no guarantee they're going to get it, and most of the time they won't. And yet it is all hands on deck with both political parties when the stock market does not deliver 10% annual growth. It is pretty clear that the weight of the federal government and the federal reserve is behind making sure VOO keeps consistently going up over the timescale of decades if not a few years. But when wages for the bottom 80% stagnated for decades, there is debate on whether or not anything needs to be done.
- imtringued 5y ago
  If investors demand 10% ROI they will just sell under performing stocks and buy better performing stocks. You're confusing ROI with interest. When lenders demand 10% interest you can bet that the interest payments are being passed onto consumers.
timbit42 5y ago
When minimum wage goes up, only people making between the former minimum wage and the new minimum wage get more money. Everyone else makes the same. This means increasing minimum wage by 10% might only see an overall increase in the cost of goods and services of 3%. An increase in minimum wage means those getting the 10% increase have a 7% better quality of life. Those who already made more than the new minimum wage now have a 3% quality of life decrease.
- pnutjam 5y ago
  The economy is not a zero sum game. Many higher wages will also go up. Furthermore, there are plenty of things that money can't buy. Most of us do much better in life when the people around us are also doing better. You don't live in the cheapest slum you can find, do you?

bserge 5y ago

Well, in this case it's cost of living. I can only speak for some of Europe. Shit is going up in price (and it doesn't seem to be slowing down). Wages are going up, too. Ultimately a bit useless, the poorest are still more fucked by CoL than they're helped by higher wages.

lotsofpulp 5y ago
Only because there is insufficient wealth transfer from the top deciles and quintiles to the bottom ones. Obviously, if society retains the same conditions that allow increasing income/wealth gaps, then higher wages will not help the poorest.

cycomanic 5y ago

It's funny if investors demand 10% ROI nobody blinks an eyelid, but if if wages are go up suddenly everyone talks about inflation. Do investors returns not increase prices?

refurb 5y ago
ROI can go up with no impact on prices, that’s why.
onion2k 5y ago
If investors decided to demand 1,000,000% ROI we wouldn't suddenly have hyperinflation. Investors can 'demand' whatever they like; there's no guarantee they're going to get it, and most of the time they won't. It's just their way of exerting control over a company. When wages go up they actually go up, which, at least according to conservative economic theory, leads to inflation. In practice though it often doesn't.
- lotsofpulp 5y ago
  > . Investors can 'demand' whatever they like; there's no guarantee they're going to get it, and most of the time they won't. And yet it is all hands on deck with both political parties when the stock market does not deliver 10% annual growth. It is pretty clear that the weight of the federal government and the federal reserve is behind making sure VOO keeps consistently going up over the timescale of decades if not a few years. But when wages for the bottom 80% stagnated for decades, there is debate on whether or not anything needs to be done.
imtringued 5y ago
If investors demand 10% ROI they will just sell under performing stocks and buy better performing stocks. You're confusing ROI with interest. When lenders demand 10% interest you can bet that the interest payments are being passed onto consumers.

timbit42 5y ago

When minimum wage goes up, only people making between the former minimum wage and the new minimum wage get more money. Everyone else makes the same. This means increasing minimum wage by 10% might only see an overall increase in the cost of goods and services of 3%. An increase in minimum wage means those getting the 10% increase have a 7% better quality of life. Those who already made more than the new minimum wage now have a 3% quality of life decrease.

pnutjam 5y ago
The economy is not a zero sum game. Many higher wages will also go up. Furthermore, there are plenty of things that money can't buy. Most of us do much better in life when the people around us are also doing better. You don't live in the cheapest slum you can find, do you?