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Inflation is at 9.1% right now, so its a net negative. https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/infl

Inflation is at 9.1% right now, so its a net negative. https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/inflation-cpi

deleted 4y ago
[deleted]
lotsofpulp 4y ago
Is it net negative for everyone? Perhaps people at the bottom are positive and people above are net negative, i.e. reduction of income/wealth gap.
- wahnfrieden 4y ago
  inflation hurts the poor and low income earners most, it widens the disparity gap
  - lotsofpulp 4y ago
    I do not see why this has to be true. Change in prices (inflation) is very different for different people or groups of people, because the goods and services they buy are very different.
    - ryathal 4y ago
      At the poorest levels wages are slowest to increase due to inflation, and there aren't cheaper beans and rice to buy at the grocery store. At the mid levels, maybe a cost of living raise eats half the current inflation, and switching to cheaper brand items can make up the difference. At the highest levels some may see inflation beating raises, have inflation protected assets, and have disposable income so inflation maybe means not going out to eat as much or not getting a new car.
      - lotsofpulp 4y ago
        > At the poorest levels wages are slowest to increase due to inflation Why would this always have to be true? For example, if the supply of labor sellers at the bottom decreases due to decreasing birthrates, immigration, or people who are no longer employable due to drug addiction. It seems conceivable to me that the lowest paying jobs would have to contend with decreasing supply of labor by increasing the pay. Perhaps the increased pay then causes increased prices for goods/services which then cause sufficient decrease in aggregate demand that demand for the labor then starts decreasing so it pushes wages at the bottom back down , but I do no see why that has to be case.
      - paulmd 4y ago
        > and there aren't cheaper beans and rice to buy at the grocery store I mean, this is a question of policy. The US Federal Government mandates that crops be burned as fuel, which hugely pushes up the price of corn and in turn that pushes up the price of other things that could be grown using that land. We don't explicitly buy up and destroy crops anymore, or pay farmers not to grow them, but the food supply is being deliberately contracted as a matter of federal policy to keep farming profits high. It seems bonkers to say that there's nothing we could do about rising food prices when we're literally paying to (from the perspective of the food supply) destroy food and keep it scarce.
      - wahnfrieden 4y ago
        Extrapolate/compare generationally
    - lamontcg 4y ago
      Commodities inflation hits the poor more. They pay more on things like food and gas which have commodities predominantly as inputs. The richer people buy more stuff which has higher labor inputs. At the same time though long-term commodities inflation is cyclical, while wage inflation tends to be sticky. If wage inflation actually causes raises in wages for working class people and isn't just contained to SWEs then long-term this is likely beneficial and would lower disparity in the long run. But this would take a decade of wage-price inflation. Short term it is a regressive tax. But the Fed is trying to go back to the conditions of the past 40 years where wage inflation has been capped at around 2% which will just squeeze the lower classes even more.
      - wahnfrieden 4y ago
        Right, I'm talking within the context of american policy. The fed wages class warfare, pardon the stale terminology, for the sake of the economy
- moate 4y ago
  It's literally the opposite: https://www.fastcompany.com/90770163/the-age-of-greedflation-is-here-see-how-obscene-ceo-to-worker-pay-ratios-are-right-now https://www.fastcompany.com/90770163/the-age-of-greedflation...
  - lotsofpulp 4y ago
    That article is using median pay as the data point. It is possible the 0% to 20% or even 30% are experiencing gains, while 30% to 60% are not. It is hard or impossible to find data by income/wealth decile, and the corresponding change in prices (inflation) of that income/wealth decile's basket of goods.' For example, the people that work in retail/hotel/travel/etc sector that typically employs the lowest paid employees with the worst quality of life at work may very well be experiencing huge gains, although not all captured by wage data, such as better quality of life at work due to not having to work late weeknights or weekends, etc. It is a difficult thing to capture in numbers.
xbar 4y ago
Right. Perhaps individuals and families are having to do more work to try to climb out of an inflation hole. New jobs are good. 2nd, 3rd and 4th jobs in families to defeat that missing 4% is sub-optimal job growth due to a variety of trade-offs.

Inflation is at 9.1% right now, so its a net negative. https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/inflation-cpi

deleted 4y ago

[deleted]

lotsofpulp 4y ago

Is it net negative for everyone? Perhaps people at the bottom are positive and people above are net negative, i.e. reduction of income/wealth gap.

wahnfrieden 4y ago
inflation hurts the poor and low income earners most, it widens the disparity gap
- lotsofpulp 4y ago
  I do not see why this has to be true. Change in prices (inflation) is very different for different people or groups of people, because the goods and services they buy are very different.
  - ryathal 4y ago
    At the poorest levels wages are slowest to increase due to inflation, and there aren't cheaper beans and rice to buy at the grocery store. At the mid levels, maybe a cost of living raise eats half the current inflation, and switching to cheaper brand items can make up the difference. At the highest levels some may see inflation beating raises, have inflation protected assets, and have disposable income so inflation maybe means not going out to eat as much or not getting a new car.
    - lotsofpulp 4y ago
      > At the poorest levels wages are slowest to increase due to inflation Why would this always have to be true? For example, if the supply of labor sellers at the bottom decreases due to decreasing birthrates, immigration, or people who are no longer employable due to drug addiction. It seems conceivable to me that the lowest paying jobs would have to contend with decreasing supply of labor by increasing the pay. Perhaps the increased pay then causes increased prices for goods/services which then cause sufficient decrease in aggregate demand that demand for the labor then starts decreasing so it pushes wages at the bottom back down , but I do no see why that has to be case.
    - paulmd 4y ago
      > and there aren't cheaper beans and rice to buy at the grocery store I mean, this is a question of policy. The US Federal Government mandates that crops be burned as fuel, which hugely pushes up the price of corn and in turn that pushes up the price of other things that could be grown using that land. We don't explicitly buy up and destroy crops anymore, or pay farmers not to grow them, but the food supply is being deliberately contracted as a matter of federal policy to keep farming profits high. It seems bonkers to say that there's nothing we could do about rising food prices when we're literally paying to (from the perspective of the food supply) destroy food and keep it scarce.
    - wahnfrieden 4y ago
      Extrapolate/compare generationally
  - lamontcg 4y ago
    Commodities inflation hits the poor more. They pay more on things like food and gas which have commodities predominantly as inputs. The richer people buy more stuff which has higher labor inputs. At the same time though long-term commodities inflation is cyclical, while wage inflation tends to be sticky. If wage inflation actually causes raises in wages for working class people and isn't just contained to SWEs then long-term this is likely beneficial and would lower disparity in the long run. But this would take a decade of wage-price inflation. Short term it is a regressive tax. But the Fed is trying to go back to the conditions of the past 40 years where wage inflation has been capped at around 2% which will just squeeze the lower classes even more.
    - wahnfrieden 4y ago
      Right, I'm talking within the context of american policy. The fed wages class warfare, pardon the stale terminology, for the sake of the economy
moate 4y ago
It's literally the opposite: https://www.fastcompany.com/90770163/the-age-of-greedflation-is-here-see-how-obscene-ceo-to-worker-pay-ratios-are-right-now https://www.fastcompany.com/90770163/the-age-of-greedflation...
- lotsofpulp 4y ago
  That article is using median pay as the data point. It is possible the 0% to 20% or even 30% are experiencing gains, while 30% to 60% are not. It is hard or impossible to find data by income/wealth decile, and the corresponding change in prices (inflation) of that income/wealth decile's basket of goods.' For example, the people that work in retail/hotel/travel/etc sector that typically employs the lowest paid employees with the worst quality of life at work may very well be experiencing huge gains, although not all captured by wage data, such as better quality of life at work due to not having to work late weeknights or weekends, etc. It is a difficult thing to capture in numbers.

xbar 4y ago

Right. Perhaps individuals and families are having to do more work to try to climb out of an inflation hole. New jobs are good. 2nd, 3rd and 4th jobs in families to defeat that missing 4% is sub-optimal job growth due to a variety of trade-offs.