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Hasn't Jerome Powell been quoted verbaitm on saying "we need to get wages down", implying that they have gotten too high and are unsustainable for most small/m

Hasn't Jerome Powell been quoted verbaitm on saying "we need to get wages down", implying that they have gotten too high and are unsustainable for most small/medium businesses to pay?

JustBreath 3y ago
Couldn't believe that shit when I heard it. I wish I could find the interview, but at one point someone brought up the question of wages going up and he basically said "Don't stress we'll get that under control soon" "That" basically meaning poor people.
- cj 3y ago
  It's not objectively good for wages to increase. As an extreme example, if the minimum wage went to $100/hr, inflation would skyrocket because demand for goods would skyrocket which would send prices for just about everything to the moon. A metric that matters a lot more is purchasing power. It's better to make $10/hr if a dozen eggs cost $2 (20% of your hourly wage), compared to making $20/hr with a dozen eggs costing $6 (30% of your hourly wage).
tedivm 3y ago
> 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. So there’s a path to that.
cj 3y ago
"Wage inflation" is talked about as a problem by various politicians and TV networks. I think the underlying logic is "if wages keep going up, it makes it harder to bring inflation down". In other words, if people get paid more, demand stays the same (or increases) which is counterproductive to lowering inflation.
- MuffinFlavored 3y ago
  I don't disagree at all. I also know it isn't this simple but in my mind it's roughly: Hey entry level worker. 2 years ago we (company) would have paid you $12/hr. Now you have made it (by not applying for our open positions we need filled/quitting over time) that you refuse to work for less than $14/hr. That's a 16% increase in our payroll. That's fine! We'll just charge 16% more for our product and the entire thing will be "put off" by the customer who will front the bill. Our bottom line is unaffected and the entire thing is a passthrough for us.
dragonwriter 3y ago
> Hasn't Jerome Powell been quoted verbaitm on saying "we need to get wages down", implying that they have gotten too high and are unsustainable for most small/medium businesses to pay? He has suggested that wage decreases are potentially one of the paths between rate increases and reduced inflation which is just an observation of basic facts of economics. Do you want him to pretend he doesn’t understand how the main monetary policy lever available to the Fed impacts the things that the Fed is responsible for targetting?

Hasn't Jerome Powell been quoted verbaitm on saying "we need to get wages down", implying that they have gotten too high and are unsustainable for most small/medium businesses to pay?

JustBreath 3y ago

Couldn't believe that shit when I heard it. I wish I could find the interview, but at one point someone brought up the question of wages going up and he basically said "Don't stress we'll get that under control soon" "That" basically meaning poor people.

cj 3y ago
It's not objectively good for wages to increase. As an extreme example, if the minimum wage went to $100/hr, inflation would skyrocket because demand for goods would skyrocket which would send prices for just about everything to the moon. A metric that matters a lot more is purchasing power. It's better to make $10/hr if a dozen eggs cost $2 (20% of your hourly wage), compared to making $20/hr with a dozen eggs costing $6 (30% of your hourly wage).

tedivm 3y ago

> 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. So there’s a path to that.

cj 3y ago

"Wage inflation" is talked about as a problem by various politicians and TV networks. I think the underlying logic is "if wages keep going up, it makes it harder to bring inflation down". In other words, if people get paid more, demand stays the same (or increases) which is counterproductive to lowering inflation.

MuffinFlavored 3y ago
I don't disagree at all. I also know it isn't this simple but in my mind it's roughly: Hey entry level worker. 2 years ago we (company) would have paid you $12/hr. Now you have made it (by not applying for our open positions we need filled/quitting over time) that you refuse to work for less than $14/hr. That's a 16% increase in our payroll. That's fine! We'll just charge 16% more for our product and the entire thing will be "put off" by the customer who will front the bill. Our bottom line is unaffected and the entire thing is a passthrough for us.

dragonwriter 3y ago

> Hasn't Jerome Powell been quoted verbaitm on saying "we need to get wages down", implying that they have gotten too high and are unsustainable for most small/medium businesses to pay? He has suggested that wage decreases are potentially one of the paths between rate increases and reduced inflation which is just an observation of basic facts of economics. Do you want him to pretend he doesn’t understand how the main monetary policy lever available to the Fed impacts the things that the Fed is responsible for targetting?