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A key driver to inflation is that wages for lower-income workers was finally starting to rise. Tanking the economy will hurt these people the most. But yes, i

A key driver to inflation is that wages for lower-income workers was finally starting to rise. Tanking the economy will hurt these people the most. But yes, inflation would flatten.

twblalock 4y ago
I think every possible "tanking the economy" scenario always hurts the poor the most.
- QuarterReptile 4y ago
  That's a straightforward, non-cynical thing to say just like 'what comes up must come down.' People don't seem to think so. Anyone with $1,000 has the resources to stop any (or several) of a large number of unfortunate circumstances that they may encounter. $10,000 even more so. $100,000 should be years of runway along the same lines. So it makes sense that when everyone is riding an economy downward, the people with the least cushion get hurt the worst.
- xwdv 4y ago
  Frankly the poor are always going to get hurt no matter what you do. Being poor isn’t a position of strength in the first place. When you’re living hand to mouth you are very sensitive to any changes in the environment.
- imtringued 4y ago
  I think unemployment hurts the poor the most because bosses fire the least productive people (untrained workers), even when those people spend a bigger portion of their salary on consumption and thereby generate demand for products to sell. A lot of the more "productive" people already have what they want and spend their money on acquiring capital which is kind of pointless if nobody is there to buy your products.
jcadam 4y ago
Still waiting for inflation to hit my effing salary. I know it won't, because we're entering stagflation territory and unemployment is going to go up. COVID was a massive wealth transfer from the lower and (esp) middle class to the oligarchs.
- bpodgursky 4y ago
  Have you asked for a raise?
  - Supermancho 4y ago
    People at my company have, in all-hands meetings. Is the company going to raise our salaries to compensate from the widely acknowledged inflation that's going on, given the company nets billions a year? No comment.
    - Nemi 4y ago
      Companies rarely increase wages of existing employees commensurate with inflation. You get the appropriate inflation-adjusted increase only when you switch jobs. It is the one bit of leverage you have as an employee - I would suggest using it. Complaining to management feels good but gets you nowhere.
      - deathanatos 4y ago
        They used to. Some do, I hear. My parent made a living working for the same employer. My SO's parent made a living working for the same employer. Somehow, not canning the entire staff every two years worked for their generation. Meanwhile, I work for tech companies where hardly anyone knows anything because nobody has any experience because the entire workforce has to turn over every two years just to try to recoup what inflation has devalued their salary to?
      - jcadam 4y ago
        You direct supervisor likely will even sympathize, but these decisions are made in most companies by people who don't even know your name.
    - bpodgursky 4y ago
      Companies aren't going to do sweeping COL raises voluntarily. You should directly ask your manager, they most likely have the flexibility to make it happen.
cjbgkagh 4y ago
I don’t know anyone who has had their salaries keep pace with inflation. And I presume the lack of pay rises is the cause for all the industrial action I keep hearing about.
- FabHK 4y ago
  Real wages had been rising in the decade bevor COVID hit: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
  - cjbgkagh 4y ago
    I’m talking post COVID when inflation started to kick in.
- queuebert 4y ago
  CEO pay has more than tracked inflation.
francisofascii 4y ago
What good is a higher wage if inflation is worse.
- ipaddr 4y ago
  Reduces preexisting debt
- ProfessorLayton 4y ago
  Unfortunately it really depends on which side of inflation one is in. Wage increases still help in an inflationary environment if one has existing debt (i.e. a mortgage). Furthermore, a lot of inflation is in housing itself, so if one already is a homeowner, then a significant amount of inflation is bypassed.
mullingitover 4y ago
...and the lower classes hold a lot of debt, which under high inflation would start to vaporize. It would effectively transfer a lot of wealth from those who hold a lot of cash to those who don't. Can't have that.
- googlryas 4y ago
  The lower classes hold a lot of debt? Can you source that? I would assume middle/upper class would hold most debt.
  - moneywoes 4y ago
    Exactly, who have the biggest mortgages?
  - mullingitover 4y ago
    The upper/middle classes hold more debt overall, but it's debt that's much easier to shed - mortgages. You can just walk away from that mortgage at any time. The lower classes are saddled with medical debt, credit card debt, and student loans which aren't dischargeable in bankruptcy.
    - googlryas 4y ago
      The middle class is the largest holder of student loan debt. Poor people either don't go to college, or go to a cheap community college, or get scholarships/financial aid. Very rich families just pay for college without taking out student loans. https://www.brookings.edu/blog/up-front/2020/10/09/who-owes-the-most-in-student-loans-new-data-from-the-fed/ https://www.brookings.edu/blog/up-front/2020/10/09/who-owes-... > The highest-income 40 percent of households (those with incomes above $74,000) owe almost 60 percent of the outstanding education debt and make almost three-quarters of the payments. The lowest-income 40 percent of households hold just under 20 percent of the outstanding debt and make only 10 percent of the payments. Also, medical and credit card debt can generally be discharged in bankruptcy. Student loan debt can't, but consider this from the same link: > What may be more surprising, however, is the difference in payment burdens. A growing share of borrowers participate in income-driven repayment (IDR) plans, which do not require any payments from those whose incomes are too low and limit payments to an affordable share of income for others. And some borrowers are in forbearance or deferment because of financial hardships. As a result, out-of-pocket loan payments are concentrated among high-income households; few low-income households enrolled in IDR are required to make payments.

A key driver to inflation is that wages for lower-income workers was finally starting to rise. Tanking the economy will hurt these people the most. But yes, inflation would flatten.

twblalock 4y ago

I think every possible "tanking the economy" scenario always hurts the poor the most.

QuarterReptile 4y ago
That's a straightforward, non-cynical thing to say just like 'what comes up must come down.' People don't seem to think so. Anyone with $1,000 has the resources to stop any (or several) of a large number of unfortunate circumstances that they may encounter. $10,000 even more so. $100,000 should be years of runway along the same lines. So it makes sense that when everyone is riding an economy downward, the people with the least cushion get hurt the worst.
xwdv 4y ago
Frankly the poor are always going to get hurt no matter what you do. Being poor isn’t a position of strength in the first place. When you’re living hand to mouth you are very sensitive to any changes in the environment.
imtringued 4y ago
I think unemployment hurts the poor the most because bosses fire the least productive people (untrained workers), even when those people spend a bigger portion of their salary on consumption and thereby generate demand for products to sell. A lot of the more "productive" people already have what they want and spend their money on acquiring capital which is kind of pointless if nobody is there to buy your products.

jcadam 4y ago

Still waiting for inflation to hit my effing salary. I know it won't, because we're entering stagflation territory and unemployment is going to go up. COVID was a massive wealth transfer from the lower and (esp) middle class to the oligarchs.

bpodgursky 4y ago
Have you asked for a raise?
- Supermancho 4y ago
  People at my company have, in all-hands meetings. Is the company going to raise our salaries to compensate from the widely acknowledged inflation that's going on, given the company nets billions a year? No comment.
  - Nemi 4y ago
    Companies rarely increase wages of existing employees commensurate with inflation. You get the appropriate inflation-adjusted increase only when you switch jobs. It is the one bit of leverage you have as an employee - I would suggest using it. Complaining to management feels good but gets you nowhere.
    - deathanatos 4y ago
      They used to. Some do, I hear. My parent made a living working for the same employer. My SO's parent made a living working for the same employer. Somehow, not canning the entire staff every two years worked for their generation. Meanwhile, I work for tech companies where hardly anyone knows anything because nobody has any experience because the entire workforce has to turn over every two years just to try to recoup what inflation has devalued their salary to?
    - jcadam 4y ago
      You direct supervisor likely will even sympathize, but these decisions are made in most companies by people who don't even know your name.
  - bpodgursky 4y ago
    Companies aren't going to do sweeping COL raises voluntarily. You should directly ask your manager, they most likely have the flexibility to make it happen.

cjbgkagh 4y ago

I don’t know anyone who has had their salaries keep pace with inflation. And I presume the lack of pay rises is the cause for all the industrial action I keep hearing about.

FabHK 4y ago
Real wages had been rising in the decade bevor COVID hit: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
- cjbgkagh 4y ago
  I’m talking post COVID when inflation started to kick in.
queuebert 4y ago
CEO pay has more than tracked inflation.

francisofascii 4y ago

What good is a higher wage if inflation is worse.

ipaddr 4y ago
Reduces preexisting debt
ProfessorLayton 4y ago
Unfortunately it really depends on which side of inflation one is in. Wage increases still help in an inflationary environment if one has existing debt (i.e. a mortgage). Furthermore, a lot of inflation is in housing itself, so if one already is a homeowner, then a significant amount of inflation is bypassed.

mullingitover 4y ago

...and the lower classes hold a lot of debt, which under high inflation would start to vaporize. It would effectively transfer a lot of wealth from those who hold a lot of cash to those who don't. Can't have that.

googlryas 4y ago
The lower classes hold a lot of debt? Can you source that? I would assume middle/upper class would hold most debt.
- moneywoes 4y ago
  Exactly, who have the biggest mortgages?
- mullingitover 4y ago
  The upper/middle classes hold more debt overall, but it's debt that's much easier to shed - mortgages. You can just walk away from that mortgage at any time. The lower classes are saddled with medical debt, credit card debt, and student loans which aren't dischargeable in bankruptcy.
  - googlryas 4y ago
    The middle class is the largest holder of student loan debt. Poor people either don't go to college, or go to a cheap community college, or get scholarships/financial aid. Very rich families just pay for college without taking out student loans. https://www.brookings.edu/blog/up-front/2020/10/09/who-owes-the-most-in-student-loans-new-data-from-the-fed/ https://www.brookings.edu/blog/up-front/2020/10/09/who-owes-... > The highest-income 40 percent of households (those with incomes above $74,000) owe almost 60 percent of the outstanding education debt and make almost three-quarters of the payments. The lowest-income 40 percent of households hold just under 20 percent of the outstanding debt and make only 10 percent of the payments. Also, medical and credit card debt can generally be discharged in bankruptcy. Student loan debt can't, but consider this from the same link: > What may be more surprising, however, is the difference in payment burdens. A growing share of borrowers participate in income-driven repayment (IDR) plans, which do not require any payments from those whose incomes are too low and limit payments to an affordable share of income for others. And some borrowers are in forbearance or deferment because of financial hardships. As a result, out-of-pocket loan payments are concentrated among high-income households; few low-income households enrolled in IDR are required to make payments.