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Inflation hurts labor, not the wealthy. Bill Gates doesn't care if his groceries are 10% more expensive. Inflation is outpacing wage increases so effective wag

Inflation hurts labor, not the wealthy. Bill Gates doesn't care if his groceries are 10% more expensive. Inflation is outpacing wage increases so effective wages are actually lower in terms of buying power. Housing is getting more expensive at a faster rate than wages are increasing. If you are pro-labor you want the fed to aggressively raise rates because that makes life harder for business.

colinsane 4y ago
> If you are pro-labor you want the fed to aggressively raise rates because that makes life harder for business. the fed presents its goals as balancing low unemployment against low inflation. any projections for unemployment have it increasing as the fed tightens. i haven’t seen anyone say who these newly unemployed are, nor where they end up. but if the tradeoff were “low unemployment, but those at the bottom of the wrung have to move to cheaper housing (and commute further, etc)” vs “higher unemployment: those at the bottom of the wrung are SOL and end up on the streets”… well, i certainly hope that’s not the tradeoff we’re actively choosing here.
- deleted 4y ago
  [deleted]
erellsworth 4y ago
Yes, inflation hurts workers. You know what also hurts workers? Low wages. The fed has specifically stated that reducing wages is one of their goals. I'm not against the fed raising rates. But any benefit workers see from such a policy is unintentional.
- vorpalhex 4y ago
  > The fed has specifically stated that reducing wages is one of their goals. Citation? I would be surprised for the fed to have such a thing as their goal.
  - erellsworth 4y ago
    "Wages are running high, the highest they’ve run in quite some time. And they are one good example of—or good illustration, really—of how tight the labor market really is, the fact that wages are running at the highest level in many decades. And that’s because of an imbalance between supply and demand and the labor market. So we think, through our policies, through further healing in the labor market, higher rates, for example, of vacancy filling and things like that, and more people coming back in, we like to think that supply and demand will come back into balance and that, therefore, wage inflation will moderate to still high levels of wage increases, but ones that are more consistent with 2 percent inflation. That’s our expectation." "So in principle, it seems as though, by moderating demand, we could see vacancies come down, and as a result—and they could come down fairly significantly and I think put supply and demand at least closer together than they are, and that that would give us a chance to have lower—to get inflation—to get wages down and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially." Implicit in all this is the idea that wages are currently too high, and need to be suppressed. https://www.wsj.com/articles/transcript-fed-chief-powells-postmeeting-press-conference-11651696613 https://www.wsj.com/articles/transcript-fed-chief-powells-po...

colinsane 4y ago

> If you are pro-labor you want the fed to aggressively raise rates because that makes life harder for business. the fed presents its goals as balancing low unemployment against low inflation. any projections for unemployment have it increasing as the fed tightens. i haven’t seen anyone say who these newly unemployed are, nor where they end up. but if the tradeoff were “low unemployment, but those at the bottom of the wrung have to move to cheaper housing (and commute further, etc)” vs “higher unemployment: those at the bottom of the wrung are SOL and end up on the streets”… well, i certainly hope that’s not the tradeoff we’re actively choosing here.

deleted 4y ago
[deleted]

erellsworth 4y ago

Yes, inflation hurts workers. You know what also hurts workers? Low wages. The fed has specifically stated that reducing wages is one of their goals. I'm not against the fed raising rates. But any benefit workers see from such a policy is unintentional.

vorpalhex 4y ago
> The fed has specifically stated that reducing wages is one of their goals. Citation? I would be surprised for the fed to have such a thing as their goal.
- erellsworth 4y ago
  "Wages are running high, the highest they’ve run in quite some time. And they are one good example of—or good illustration, really—of how tight the labor market really is, the fact that wages are running at the highest level in many decades. And that’s because of an imbalance between supply and demand and the labor market. So we think, through our policies, through further healing in the labor market, higher rates, for example, of vacancy filling and things like that, and more people coming back in, we like to think that supply and demand will come back into balance and that, therefore, wage inflation will moderate to still high levels of wage increases, but ones that are more consistent with 2 percent inflation. That’s our expectation." "So in principle, it seems as though, by moderating demand, we could see vacancies come down, and as a result—and they could come down fairly significantly and I think put supply and demand at least closer together than they are, and that that would give us a chance to have lower—to get inflation—to get wages down and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially." Implicit in all this is the idea that wages are currently too high, and need to be suppressed. https://www.wsj.com/articles/transcript-fed-chief-powells-postmeeting-press-conference-11651696613 https://www.wsj.com/articles/transcript-fed-chief-powells-po...