5 ms·

If you have been at work for a long time in the same kind of job role, you will notice that you do many more tasks than you used too, that you are expected to d

If you have been at work for a long time in the same kind of job role, you will notice that you do many more tasks than you used too, that you are expected to do more hours to cover gaps and the organization does not fully resource your team. The perks you had in your contract have been reduced and denied to new people. There is no staff canteen, no extra pay at weekends, every day is just part of the normal working rota. You will also see more computer automation and generally less people. So if the workers are working harder and smarter and more flexibly for less, I wonder where all that increased productivity was wasted and by who.

dumpsterlid 4y ago
"I wonder where all that increased productivity was wasted and by who." By the same people telling us inflation is happening because wages were going up/workers had more leverage, not price gouging by oil companies and such.
- WalterBright 4y ago
  Inflation is caused by the government printing excess money. Not by gougers or union wage demands.
  - politician 4y ago
    Well, there are two types of inflation. The one that you identified is when prices go up because demand goes up -- more money in more people's pockets allow people to bid more for goods and services. The other type of inflation happens when prices go up because the amount of supply drops -- people and businesses bid up on critical inputs like toilet paper and manufacturing process inputs. So while it's true that an economy can experience inflation when "the government prints money", it's also true that factors that lead to reductions in raw materials and intermediates (like a war between the 1st and 4th grain producers) will tend to cause prices to rise.
    - WalterBright 4y ago
      > The other type of inflation happens when prices go up because the amount of supply drops If you have to spend more on X, that means you have less to spend on Y. Because of the Law of Supply&Demand, the reduced demand for Y results in a corresponding drop in the price of Y. That's why it's not inflation.
      - politician 4y ago
        Imagine you're running a factory that consumes Aluminum and produces Aluminum cans. If the half of the sources that supply your raw material inputs go offline, then you'll either pay more for the supply from marginal producers or reduce your output. In either case, you'll be forced with a decision to raise the price of your product to maintain your margin or reduce your output. A downstream consumer of your cans will either see their prices rise for their inputs (your cans) and call it inflation, or they will have to source additional cans from additional marginal suppliers at additional costs because your volume dropped. The average cost of cans will have increased and that's inflation too.
        WalterBright 4y ago
        They can call it inflation, but it is not.
        tomrod 4y ago
        Economist here. I think you may be confused in the definition of inflation. I responded to another comment of yours, and will reiterate a good writeup I recommend reviewing for improving your understanding on what inflation is: https://www.investopedia.com/articles/05/012005.asp https://www.investopedia.com/articles/05/012005.asp
        WalterBright 4y ago
        Cost-push and demand-pull theories of inflation have been discredited by Reisman in "Capitalism". And as Milton Friedman wrote, "Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output." Of course, this is saying the same thing as the Law of Supply & Demand. More money being created wrt the goods and services it represents mean the money gets devalued.
  - tomrod 4y ago
    Economist here! Inflation is an increase in the aggregate price level. There isn't a single cause. Under the velocity of money theory (which most folks learn in AP Economics and intro college economics courses), an increase in dollars can indeed map to an increase in aggregate price level. Since the sovereign controls the money supply, then "printing money" is indeed considered a driver of inflation under that model. Being a model, it doesn't capture all elements (especially dynamics and feedback cycles). Further, a government printing of excess money is not the only way to increase the money supply in circulation. Large generalized increases in discretionary spending can do the same (another injection into the money supply) -- consider Japan. For folks wanting an accessible intro, investopedia does a decent writeup: https://www.investopedia.com/articles/05/012005.asp https://www.investopedia.com/articles/05/012005.asp
    - WalterBright 4y ago
      The single cause is a devaluation of the currency. The price rise that results is explained by the Law of Supply&Demand - more dollars lowers the value of each dollar.
      - tomrod 4y ago
        Increased dollars were two factors I mentioned in my comment, yes, and the primer will discuss other factors you have missed that I did not discuss that aren't more dollars chasing the same stock of goods. Good luck out there.
mschuster91 4y ago
> I wonder where all that increased productivity was wasted and by who. It was stolen by the upper classes and distributed to the stock markets, which exploded in value. There's numerous graphs outlining exploding stock markets, C-level payments or rents over the last decades, but wages have largely stagnated. And yes, a bit of the stock market increase is due to QE policy flooding the markets with money.
- idlehand 4y ago
  That makes sense if you think of things in purely monetary terms, the money was skimmed off and given to the 1%. It doesn't make sense if you think of it in terms of the supply and demand of goods and services. If demand exceeds the capacity of society to produce and import, we get inflation and full employment. The US has had modest to high inflation and high employment for most of the last decade. So clearly there isn't an excess of goods and services, because if there is, sellers undercut each other for market share which keeps prices down. The money going to the wealthy through capitalist exploitation is mostly removed from circulation, see the marginal propensity to consume. It ends up in the stock market, or bonds or such. Taking money out of circulation is deflationary and makes the rest of the money more valuable; fewer dollars chasing the same amount of goods and services means lower prices and more purchasing power.
Vaslo 4y ago
Salaried employees are a fixed cost. Just like we try to improve our production costs by absorbing it and spreading through more gallons/widgets, we do the same with our salaried employees. The piece that gets missed is often the useless work we do that is the real savings for the company. Instead we are not working later to get answers to some executive who demands them a day earlier than they really need them because we cut a headcount.

dumpsterlid 4y ago

"I wonder where all that increased productivity was wasted and by who." By the same people telling us inflation is happening because wages were going up/workers had more leverage, not price gouging by oil companies and such.

WalterBright 4y ago
Inflation is caused by the government printing excess money. Not by gougers or union wage demands.
- politician 4y ago
  Well, there are two types of inflation. The one that you identified is when prices go up because demand goes up -- more money in more people's pockets allow people to bid more for goods and services. The other type of inflation happens when prices go up because the amount of supply drops -- people and businesses bid up on critical inputs like toilet paper and manufacturing process inputs. So while it's true that an economy can experience inflation when "the government prints money", it's also true that factors that lead to reductions in raw materials and intermediates (like a war between the 1st and 4th grain producers) will tend to cause prices to rise.
  - WalterBright 4y ago
    > The other type of inflation happens when prices go up because the amount of supply drops If you have to spend more on X, that means you have less to spend on Y. Because of the Law of Supply&Demand, the reduced demand for Y results in a corresponding drop in the price of Y. That's why it's not inflation.
    - politician 4y ago
      Imagine you're running a factory that consumes Aluminum and produces Aluminum cans. If the half of the sources that supply your raw material inputs go offline, then you'll either pay more for the supply from marginal producers or reduce your output. In either case, you'll be forced with a decision to raise the price of your product to maintain your margin or reduce your output. A downstream consumer of your cans will either see their prices rise for their inputs (your cans) and call it inflation, or they will have to source additional cans from additional marginal suppliers at additional costs because your volume dropped. The average cost of cans will have increased and that's inflation too.
      - WalterBright 4y ago
        They can call it inflation, but it is not.
        tomrod 4y ago
        Economist here. I think you may be confused in the definition of inflation. I responded to another comment of yours, and will reiterate a good writeup I recommend reviewing for improving your understanding on what inflation is: https://www.investopedia.com/articles/05/012005.asp https://www.investopedia.com/articles/05/012005.asp
        WalterBright 4y ago
        Cost-push and demand-pull theories of inflation have been discredited by Reisman in "Capitalism". And as Milton Friedman wrote, "Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output." Of course, this is saying the same thing as the Law of Supply & Demand. More money being created wrt the goods and services it represents mean the money gets devalued.
- tomrod 4y ago
  Economist here! Inflation is an increase in the aggregate price level. There isn't a single cause. Under the velocity of money theory (which most folks learn in AP Economics and intro college economics courses), an increase in dollars can indeed map to an increase in aggregate price level. Since the sovereign controls the money supply, then "printing money" is indeed considered a driver of inflation under that model. Being a model, it doesn't capture all elements (especially dynamics and feedback cycles). Further, a government printing of excess money is not the only way to increase the money supply in circulation. Large generalized increases in discretionary spending can do the same (another injection into the money supply) -- consider Japan. For folks wanting an accessible intro, investopedia does a decent writeup: https://www.investopedia.com/articles/05/012005.asp https://www.investopedia.com/articles/05/012005.asp
  - WalterBright 4y ago
    The single cause is a devaluation of the currency. The price rise that results is explained by the Law of Supply&Demand - more dollars lowers the value of each dollar.
    - tomrod 4y ago
      Increased dollars were two factors I mentioned in my comment, yes, and the primer will discuss other factors you have missed that I did not discuss that aren't more dollars chasing the same stock of goods. Good luck out there.

mschuster91 4y ago

> I wonder where all that increased productivity was wasted and by who. It was stolen by the upper classes and distributed to the stock markets, which exploded in value. There's numerous graphs outlining exploding stock markets, C-level payments or rents over the last decades, but wages have largely stagnated. And yes, a bit of the stock market increase is due to QE policy flooding the markets with money.

idlehand 4y ago
That makes sense if you think of things in purely monetary terms, the money was skimmed off and given to the 1%. It doesn't make sense if you think of it in terms of the supply and demand of goods and services. If demand exceeds the capacity of society to produce and import, we get inflation and full employment. The US has had modest to high inflation and high employment for most of the last decade. So clearly there isn't an excess of goods and services, because if there is, sellers undercut each other for market share which keeps prices down. The money going to the wealthy through capitalist exploitation is mostly removed from circulation, see the marginal propensity to consume. It ends up in the stock market, or bonds or such. Taking money out of circulation is deflationary and makes the rest of the money more valuable; fewer dollars chasing the same amount of goods and services means lower prices and more purchasing power.

Vaslo 4y ago

Salaried employees are a fixed cost. Just like we try to improve our production costs by absorbing it and spreading through more gallons/widgets, we do the same with our salaried employees. The piece that gets missed is often the useless work we do that is the real savings for the company. Instead we are not working later to get answers to some executive who demands them a day earlier than they really need them because we cut a headcount.