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Glad this was the top comment. Wages have not kept up with cost of living for 50 years in the US. We need to stop pretending flat wages are some modern proble

Glad this was the top comment. Wages have not kept up with cost of living for 50 years in the US. We need to stop pretending flat wages are some modern problem of inflation, and we need to stop pretending inflation is some problem caused by the pandemic.

fuzzfactor 5y ago
>Worker pay isn’t keeping up with inflation If this wasn't a predictable outcome when inflation is triggered, it would be imposed by design.
cblconfederate 5y ago
We also need to stop pretending that flat (i.e. depreciating) wages are normal
- gruez 5y ago
  but wages aren't flat? In gp's post it's only "flat" when adjusting for inflation, which means it's not depreciating.
barney54 5y ago
Inflation at the levels we are seeing it is certainly a problem caused by the pandemic and the reactions to the pandemic.
- throwawaycities 5y ago
  Markets and corporate profits were at record highs pre-pandemic, and even with any supply chain issues the market and corporate profits are at new all time highs now. The pandemic is just a convenient scapegoat and excuse for decades of congressional over spending and bad policy ultimately responsible for the current inflation. Since Clinton the national debt doubled under every administration (Trump was on track if he won a 2nd term). Each administration also had trillion $ bailouts/stimulus bills. Biden already has a trillion $ stimulus ($1.9T), and that is blamed/justified on the pandemic. However, we can already predict the next administration will also have its own trillion $+ bailout/stimulus its just a question of what that will be “blamed” on to justify it.
AlexandrB 5y ago
I don't get why minimum wage isn't tied to the CPI by default. I supposed there's a risk of it creating a positive feedback loop, but only a small portion of the workforce is paid at minimum wage. It seems capricious for minimum wage to only be increased when the legislative branch decides it's popular enough to fight for.
- pydry 5y ago
  Because both parties are owned by oligarchs who would lose money if that happened. Minimum wage hikes chew through profits and profits are pretty much the #1 legislative priority because that's the primary concern of those doing the campaign financing. Same reason gun control wont happen no matter how many people get killed - ultimately its because gun manufacturers would lose money. American politics is the art of trying to shape public opinion just enough to be compatible with the desires of campaign financers.
  - shakezula 5y ago
    And the reason countries like NZ seem to be able to quickly and efficiently pass sweeping gun reform laws is because it’s not effecting any major gun producers bottom line. In America that is very much not the situation. Additionally, even if profits were a moot point, the 2nd amendment is a culture war wedge issue that runs bone-deep for the average American.
    - pydry 5y ago
      The gun industry started the culture war for profit and fans the flames for profit. Take away the profit margins and have a few more mass shootings and I imagine the 2nd amendment would melt away as easily as the 4th did.
      - dfxm12 5y ago
        A few more mass shootings? HA! A few more at this point would be like a raindrop in the ocean. It's obvious that's not a factor for anyone with any real political/legislative power here.
tootie 5y ago
Is it not a problem? Wages rose substantially in the years between WWII and the 1970s but isn't that the actual aberration?
- xapata 5y ago
  Could be. It might be that the existence of a substantial middle class, rather than a long tail of poverty, was an anomaly. Of course, we could choose to redistribute wealth to create any shape of curve we desire.
- bumby 5y ago
  But what if you compare it to GDP? Production per capita has increased, yet the workers wages have not. I tend to think the “aberration” was due to the increase of private union membership, which has decreased since the 1980s.
- ike77 5y ago
  When people are exploited systemically, they tend not to turn against their exploiters (which are often hard to identify) but against each other. I think part of the promise of increasing the quality of life of everyone after WWII wasn't only out of the goodness of the heart, but also to avoid reaching the level of generalized hate that made it possible in the first place.
- mc32 5y ago
  That’s part of it. It’s similar to China from the 90’s to the 2020’s. Likely Chinese will not see real wages go up at the same rate in the 2039’s as they did the previous decades. That said, what’s eating real wage growth is outsourcing. It’s simple. If I can build a fridge by paying workers in China or Mexico $2/hr vs paying a US worker $22/hr in a manufactury plant, my competition will eventually lose market share and shutter if they don’t also move manufacturing to a cheaper labor market. Without any import taxes to adjust for labor conditions and costs, thus will put downward pressure on stateside labor markets. People know this. But they ALSO complain of stagnating wages, while at the same time NOT wanting their US manufactured good to be more expensive than those made over seas!
xwolfi 5y ago
Wages ARE the cost of living. Who do you think make your food, your clothes and your light ? Are you sure it's not your own desires getting ahead of your wage ? I feel we can do things our grandparents couldnt even dream of (mines remember a time in his French village when horses would collect garbage, horses!) and that our parents suspected only. Hell the fact I can speak English and all it cost was a few taxe raises in education is already money well spent. Tiring a bit to hear people bemoan a golden era where tv where black and white, religion prevalent, people disconnected, books expensive, knowledge hidden and medicine an embryo of what it is now. Toil a bit, build more for your children and keep your eyes away from your selfpity.
- mctaylor 5y ago
  The idea that those who are falling through the cracks in the system is because they aren't working hard enough is crap. Thanks to the "golden age" you correctly say we live in, automation and globalisation have steadily eroded the value of human labor since the 70s (a big part of why real wage growth has been negative). Thanks in part to financialization and in part to anti-competitive regulations that benefit monopolistic incumbents, growth is increasingly driven by financialization and rent-seeking from capital owners. The fact that you are on HN likely means you benefit from your ability to assist the upper class (billionaires) increase their share of the wealth by diligently creating more and more intellectual property capital. The numbers don't lie, and the numbers show the poor are getting poorer (despite working just as hard), and the rich are getting richer (and none more so than the billionaires who own the intellectual property capital that let's them extract ever-increasing rents in exchange for granting ever-decreasing access to the latest innovations - particularly in pharmaceuticals and technology).
- avgcorrection 5y ago
  What’s your wage?
- 8note 5y ago
  There are costs besides wages. Eg. Profit, tax, and rent
kerneloftruth 5y ago
The inflation was largely caused by bad government policy: distributing trillions of dollars into an economy as "stimulus" (i.e. American Rescue Plan) when it needed very little or none. Politicians demonstrate regularly that Economics is not knowledge many of them possess. They acted on emotion and pure political calculation, instead.
vmception 5y ago
The other side of this to remember is that highly compensated employees are still subjects to this reality. The numbers themselves dont actually matter. It doesnt matter if highly compensated to you means $88k or $150k annual compensation, $450k or $750k. If a single earner cant buy a home outright in 5 years in that area, then the compensation isn't high enough compared to when wages were keeping up. There was a housing shortage in the 1970s too, so the supply side isnt a worthwhile deflection. The oppression contest and olympics from the masses earning way less isn't really useful because that just conveniently perpetuates the reality.
- whimsicalism 5y ago
  > There was a housing shortage in the 1970s too, so the supply side isnt a worthwhile deflection. Uh, source on the housing shortage in the 1970s being even remotely close to this level? Because, yeah, demand outstripping the heck out of supply is the "deflection" I'd pick.
  - vmception 5y ago
    Regardless, landlords set the price. They always had the opportunity to post ridiculous prices, and they bring them to the price people accept. They dont have to go to the edge of what someone would accept. But they do. The same tech worker (or whoever a local municipality happens to be pointing fingers at) would pay $1200/mo in one area, or $7500/mo in the other area. A wealthy class of people have always existed that can pay rent or mortgage or own at pretty much any price. The landlords are the greedy ones - the neighbors and corporations that were already there for the most part. I’m not arguing for anything (in case someone mistakes this for a rent control argument), just have been in enough cities to hear it all.
    - xapata 5y ago
      Landlords are price takers, not price makers. The market for apartments is highly competitive.
      - 5y ago

fuzzfactor 5y ago

>Worker pay isn’t keeping up with inflation If this wasn't a predictable outcome when inflation is triggered, it would be imposed by design.

cblconfederate 5y ago

We also need to stop pretending that flat (i.e. depreciating) wages are normal

gruez 5y ago
but wages aren't flat? In gp's post it's only "flat" when adjusting for inflation, which means it's not depreciating.

barney54 5y ago

Inflation at the levels we are seeing it is certainly a problem caused by the pandemic and the reactions to the pandemic.

throwawaycities 5y ago
Markets and corporate profits were at record highs pre-pandemic, and even with any supply chain issues the market and corporate profits are at new all time highs now. The pandemic is just a convenient scapegoat and excuse for decades of congressional over spending and bad policy ultimately responsible for the current inflation. Since Clinton the national debt doubled under every administration (Trump was on track if he won a 2nd term). Each administration also had trillion $ bailouts/stimulus bills. Biden already has a trillion $ stimulus ($1.9T), and that is blamed/justified on the pandemic. However, we can already predict the next administration will also have its own trillion $+ bailout/stimulus its just a question of what that will be “blamed” on to justify it.

AlexandrB 5y ago

I don't get why minimum wage isn't tied to the CPI by default. I supposed there's a risk of it creating a positive feedback loop, but only a small portion of the workforce is paid at minimum wage. It seems capricious for minimum wage to only be increased when the legislative branch decides it's popular enough to fight for.

pydry 5y ago
Because both parties are owned by oligarchs who would lose money if that happened. Minimum wage hikes chew through profits and profits are pretty much the #1 legislative priority because that's the primary concern of those doing the campaign financing. Same reason gun control wont happen no matter how many people get killed - ultimately its because gun manufacturers would lose money. American politics is the art of trying to shape public opinion just enough to be compatible with the desires of campaign financers.
- shakezula 5y ago
  And the reason countries like NZ seem to be able to quickly and efficiently pass sweeping gun reform laws is because it’s not effecting any major gun producers bottom line. In America that is very much not the situation. Additionally, even if profits were a moot point, the 2nd amendment is a culture war wedge issue that runs bone-deep for the average American.
  - pydry 5y ago
    The gun industry started the culture war for profit and fans the flames for profit. Take away the profit margins and have a few more mass shootings and I imagine the 2nd amendment would melt away as easily as the 4th did.
    - dfxm12 5y ago
      A few more mass shootings? HA! A few more at this point would be like a raindrop in the ocean. It's obvious that's not a factor for anyone with any real political/legislative power here.

tootie 5y ago

Is it not a problem? Wages rose substantially in the years between WWII and the 1970s but isn't that the actual aberration?

xapata 5y ago
Could be. It might be that the existence of a substantial middle class, rather than a long tail of poverty, was an anomaly. Of course, we could choose to redistribute wealth to create any shape of curve we desire.
bumby 5y ago
But what if you compare it to GDP? Production per capita has increased, yet the workers wages have not. I tend to think the “aberration” was due to the increase of private union membership, which has decreased since the 1980s.
ike77 5y ago
When people are exploited systemically, they tend not to turn against their exploiters (which are often hard to identify) but against each other. I think part of the promise of increasing the quality of life of everyone after WWII wasn't only out of the goodness of the heart, but also to avoid reaching the level of generalized hate that made it possible in the first place.
mc32 5y ago
That’s part of it. It’s similar to China from the 90’s to the 2020’s. Likely Chinese will not see real wages go up at the same rate in the 2039’s as they did the previous decades. That said, what’s eating real wage growth is outsourcing. It’s simple. If I can build a fridge by paying workers in China or Mexico $2/hr vs paying a US worker $22/hr in a manufactury plant, my competition will eventually lose market share and shutter if they don’t also move manufacturing to a cheaper labor market. Without any import taxes to adjust for labor conditions and costs, thus will put downward pressure on stateside labor markets. People know this. But they ALSO complain of stagnating wages, while at the same time NOT wanting their US manufactured good to be more expensive than those made over seas!

xwolfi 5y ago

Wages ARE the cost of living. Who do you think make your food, your clothes and your light ? Are you sure it's not your own desires getting ahead of your wage ? I feel we can do things our grandparents couldnt even dream of (mines remember a time in his French village when horses would collect garbage, horses!) and that our parents suspected only. Hell the fact I can speak English and all it cost was a few taxe raises in education is already money well spent. Tiring a bit to hear people bemoan a golden era where tv where black and white, religion prevalent, people disconnected, books expensive, knowledge hidden and medicine an embryo of what it is now. Toil a bit, build more for your children and keep your eyes away from your selfpity.

mctaylor 5y ago
The idea that those who are falling through the cracks in the system is because they aren't working hard enough is crap. Thanks to the "golden age" you correctly say we live in, automation and globalisation have steadily eroded the value of human labor since the 70s (a big part of why real wage growth has been negative). Thanks in part to financialization and in part to anti-competitive regulations that benefit monopolistic incumbents, growth is increasingly driven by financialization and rent-seeking from capital owners. The fact that you are on HN likely means you benefit from your ability to assist the upper class (billionaires) increase their share of the wealth by diligently creating more and more intellectual property capital. The numbers don't lie, and the numbers show the poor are getting poorer (despite working just as hard), and the rich are getting richer (and none more so than the billionaires who own the intellectual property capital that let's them extract ever-increasing rents in exchange for granting ever-decreasing access to the latest innovations - particularly in pharmaceuticals and technology).
avgcorrection 5y ago
What’s your wage?
8note 5y ago
There are costs besides wages. Eg. Profit, tax, and rent

kerneloftruth 5y ago

The inflation was largely caused by bad government policy: distributing trillions of dollars into an economy as "stimulus" (i.e. American Rescue Plan) when it needed very little or none. Politicians demonstrate regularly that Economics is not knowledge many of them possess. They acted on emotion and pure political calculation, instead.

vmception 5y ago

The other side of this to remember is that highly compensated employees are still subjects to this reality. The numbers themselves dont actually matter. It doesnt matter if highly compensated to you means $88k or $150k annual compensation, $450k or $750k. If a single earner cant buy a home outright in 5 years in that area, then the compensation isn't high enough compared to when wages were keeping up. There was a housing shortage in the 1970s too, so the supply side isnt a worthwhile deflection. The oppression contest and olympics from the masses earning way less isn't really useful because that just conveniently perpetuates the reality.

whimsicalism 5y ago
> There was a housing shortage in the 1970s too, so the supply side isnt a worthwhile deflection. Uh, source on the housing shortage in the 1970s being even remotely close to this level? Because, yeah, demand outstripping the heck out of supply is the "deflection" I'd pick.
- vmception 5y ago
  Regardless, landlords set the price. They always had the opportunity to post ridiculous prices, and they bring them to the price people accept. They dont have to go to the edge of what someone would accept. But they do. The same tech worker (or whoever a local municipality happens to be pointing fingers at) would pay $1200/mo in one area, or $7500/mo in the other area. A wealthy class of people have always existed that can pay rent or mortgage or own at pretty much any price. The landlords are the greedy ones - the neighbors and corporations that were already there for the most part. I’m not arguing for anything (in case someone mistakes this for a rent control argument), just have been in enough cities to hear it all.
  - xapata 5y ago
    Landlords are price takers, not price makers. The market for apartments is highly competitive.
    - 5y ago