7 ms·

55% of workers say their pay isn't keeping up with inflation

70 points by MoBarouma 3y ago

perlgeek 3y ago
Only 55%? I guess this is US only (but doesn't say so...)
nairboon 3y ago
You got still robbed, even if you did get a pay increase at the end of the year. They measure the increase in prices over a year and sometimes increase pay to match it But you have already worked a year for the lower salary. It would be fair if the pay increase is slightly higher than the inflation.
- prepend 3y ago
  I think “robbed” is a bit hyperbolic. Pay isn’t linked to inflation directly for a reason. Not everything I spend my pay on is affected by inflation, especially not in real time. It’s possible to run your own business and link directly to pay and real time profits. But the exchange for not getting weekly pay increases to match inflation is that we don’t get drops when companies lose money. Pay isn’t linked directly to purchasing power and is really a market function. Companies pay as little as they can pay and workers work for as much as they can get. Obviously this is simplified and macro, but my point is that pay is based on need, but on availability. I wouldn’t want a “fair” system that only paid me based on inflation and other factors.
qeternity 3y ago
If pay kept up with inflation, then inflation would never subside. Sometimes real wages are grow, and sometimes they shrink.
- cycomanic 3y ago
  Except that inflation this time was not really driven by wage increases (many had very small increases if any throughout covid), what grew massively is corporate profits.
- faeriechangling 3y ago
  Sure inflation would never subside, but people would still be more able to afford things if wage increases outpaced inflation. Wage increases and inflation are sort of inevitable right now because capital is overvalued. All these schemes to try and control inflation by suppressing wages are bound to fail. The people who are extracting rents on the economy need to have their rents reduced and inflation naturally eats into those rents. The problem isn't that people at McDonalds are making too much money, they are still making a pittance after all the wage hikes, the problem is unproductive rent seekers.
- PaulRobinson 3y ago
  That's a myth.
- ssss11 3y ago
  With inflation though some one/group is making the extra money. Assume for a moment it’s the wealthy as they own assets, shares in companies etc. The argument that “if regular people got pay rises it would fuel inflation” may be true but it’s no solution to our wealth inequality issues, and so presumably the cycle of the wealthy getting wealthier and the rest of us getting poorer should just continue?
jstummbillig 3y ago
Over the last 10(?) years pay increase was ahead of inflation. Mind you, that's just an observation – but I don't understand why pay keeping up with current inflation would even be the expectation? These things are not synchronised, in either direction.
fbn79 3y ago
It's good, it means we are not going in an wage-price spiral https://en.wikipedia.org/wiki/Wage-price_spiral https://en.wikipedia.org/wiki/Wage-price_spiral
- PaulRobinson 3y ago
  This proposed explanation is a myth. Profits - often created through the use of investing cheap money (and therefore the creation of more money) - drive inflation. Wages do not. OECD have shown this to be the case thanks to the recent handy experiment in the form of a pandemic arriving after a period of quantitative easing and very low interest rates in the UK.
- dan_mctree 3y ago
  There are various things that go into inflation, and wages are only a small part of it. Wage price spirals are very unlikely and have not been demonstrated. Wages are not 100% of the cost of products, so even if companies directly increase product prices exactly by labor cost increases, the product prices would not increase by as much as wages did. More likely causes for system wide inflation generally lie in limited substitution options for people. If they have to buy from limited options, either because of a lack or supply or because of monopolistic behavior, prices can be jacked up as undercutting is of no concern. This can happen both at the finished products level, or somewhere in the chain. E.g. the cost of gasoline goes up due to lack of alternatives and since it is used by companies making and transporting many types of products, prices go up everywhere.
mathieuh 3y ago
In the UK I haven't had a pay increase anywhere near inflation since 2019. I've had to move company twice since then in order to maintain or increase my standard of living. I'm now making 65% above what I was making in 2019, whereas if I'd taken the pay increases offered I'd be making 13% more right now than in 2019. Considering prices in the UK are 22% higher than they were in 2019 that's pretty bad, and IT is a well-paid industry, so you can imagine what it's like for people on lower wages.
- WentFullRetard 3y ago
  [dead]
- nly 3y ago
  Same here. Jumped ship in late 2021 for a 50% pay increase. Haven't had a pay rise with new employer since. They have one more chance this annual review cycle or I'm jumping again. My monthly mandatory expenses (excluding mortgage, since it's fixed for now) have crept up 15-20% this year. Just renewed my home insurance it's gone up 40% since Dec 22 In 4 years I'm expecting my mortgage payments (my biggest expense) to increase at least 30%. We're pretty comfortable, and think we stay off the hedonic treadmill as much as possible, but looking to start a family and I have a lot of financial anxiety despite a decent 6 figure salary in London Total (not marginal) tax burden on my salary is >40% and getting worse every year due to fiscal drag.
- doix 3y ago
  The UK is insane. I left in 2020 and came back to visit recently, things are over 50% more expensive. I used to buy 20 chicken nuggets for £4, it was £6.50 or something. Pints are £7+ instead of £4. I stayed with a friend and he kept his flat at 15c because heating beyond that was too expensive. I used to keep it at 18 and didn't even consider the costs (once I stopped being a student). I appreciate that the 22% more expensive is on average, but the things that I care about have gotten significantly more expensive. It really killed any desire I have of ever moving back there.
  - 15457345234 3y ago
PaulRobinson 3y ago
The argument often used by governments is that pay rises drive inflation, so must be supressed in order to pull inflation back down. Problem is, that's not entirely true. The OECD[1] looked at whether workers, business or governments had contributed most to inflation, and the data revealed that in the UK at least, business profits were most to blame. If wages don't drive inflation, and profits do, you can lower inflation, increase quality of life and create a more equitable society by putting pressure on business to pay their staff more, and have smaller profits. Of course that won't happen, because we're now living in a dystopian Ayn Rand/Margaret Thatcher-inspired wet dream, so y'know, be safe out there and godspeed. [1] https://www.oecd-ilibrary.org/sites/ce188438-en/1/3/1/index.html?itemId=/content/publication/ce188438-en&_csp_=f8e326092da6dbbbef8fbfa1b8ad3d52&itemIGO=oecd&itemContentType=book#figure-d1e804-6539cc9538 https://www.oecd-ilibrary.org/sites/ce188438-en/1/3/1/index....
- Dalewyn 3y ago
  The problem with raising pay across the board is that it reduces the value of money. Everyone is making $15 more? Great! Now everything is $15 more expensive to make up for the loss in currency value; more money in circulation means each dollar and cent is worth less. This is then compounded because most business have no reason to not just offload the cost of increased pay onto the customers, who also got increased pay from their work. So by increasing pay, money and manhours both lose value while the value of goods stay the same. To be clear: Increasing pay is one of many levers that can be pulled to address inflation, but just increasing pay is not going to address inflation (and will likely make inflation worse).
  - WD40forRust42 3y ago
    >The problem with raising pay across the board is that it reduces the value of money. No, printing more money to make more loans and bail out the crony financiers causes a reduction in money value.
- Sankozi 3y ago
  "If wages don't drive inflation" They do. "you can lower inflation, increase quality of life and create a more equitable society by putting pressure on business to pay their staff more, and have smaller profits" If profits are high, then it means that prices are too high. To reduce inflation you need to lower prices, not to redistribute profits from (too) high prices.
jgilias 3y ago
And headline inflation is just one part of the story. Broad money growth has averaged around 7% for decades for USD, similar for other ‘stable’ currencies, and much worse for the ‘not so stable’ currencies. If you’re rich enough, you won’t keep your value in cash, but rather will buy some assets using it (equity, property, whatever). If you’re rich enough and smart enough you’ll have realized that you can take loans to finance asset purchases in effect shorting the currency. However, if you’re not rich enough, depend on your wage, and can’t short the currency by buying up assets, you get the short end of the stick. Some say this is by design. I recently read an article in the Economist arguing how income inequality has actually gotten better in the rich world. They argued that the wage gap between blue collar and white collar workers has been shrinking. I expect that to accelerate with the advent of AI. But the wage gap says less and less about income inequality when the society gets divided into owner and wage bound classes.
- faeriechangling 3y ago
  The wage gap was always nonsense meant to get people angry at the working class over inequality not caused by the working class. Notice how governments never spread propaganda about the WEALTH gap or insist wealthy people redistribute their assets to various minority groups. When governments focus on the evils of wages and ignore wealth, just understand they're trying to stoke hatred and prejudice between poor members of various identity groups to distract people from the fact that the wealthy are fucking everybody.
  - globular-toast 3y ago
    Bingo. I'm not sure where you're from but it's especially bad somewhere like the UK where income tax rapidly approaches 50% once you get above median income. There is simply no way for people who start with nothing to leave the rental class. When you look at rich people, they inherited it. Doesn't matter how well they did in school or how hard they work. Another major pain point is how much more tax effective it is for everyone to work as opposed to families having a single income. Basically you only get to take advantage of both partners' tax allowance if both work, meaning people who have to work (renters) have to work even more and probably live off copious shite food like microwave meals or eating out which costs even more and have to pay for someone to look after any children and even walk their dog! The 99% movement had it right. What they didn't have was any actionable solutions to this problem, unfortunately. Now that's all been forgotten and people are more interested in issues like men vs women which tell us all men are screwing all women as opposed to the truth which is a few wealthy (mostly men) are screwing everybody.
TMWNN 3y ago
[flagged]
besil 3y ago
In Italy, salaries decreased from 1990. In all other countries they increased. https://www.reuters.com/markets/europe/why-us-italy-seeks-way-out-low-wage-economy-trap-2022-06-16/ https://www.reuters.com/markets/europe/why-us-italy-seeks-wa...
- BelleOfTheBall 3y ago
  Wow, this is grim. Especially in conjunction with the article highlighting an aging population. I'm guessing a lot of young Italian professionals move abroad as it offers better salaries?
  - OfSanguineFire 3y ago
    Aging population in Italy is due to birthrates in Italy dropping before this trend reached other developed countries.
- expertentipp 3y ago
  Since like forever, 1600 EUR net monthly is a good salary in Italy. Hahaha, I'm joking - you'll never get indefinite employment contract in Italy. This can explain the invasion of Italian guys to post-Communist countries. In addition to earning slightly more, they're fucking their brains out there. In exchange we can visit Italy in summer, see their old people, be robbed in cafes, restaurants, hotels, or literally be robbed... quite miserable exchange.
fifilura 3y ago
> 55% of workers say their pay isn't keeping up with inflation If you apply strict mathematical interpretation to that sentence I guess that means that salaries are pretty spot on with keeping up with inflation. I.e the rest 45% implicitly says it keeps up with inflation.
- dan_mctree 3y ago
  Or not at all. If the 45% are exactly on the mark with inflation, then the average would be significantly below inflation. The 45% would have to significantly exceed inflation for it to be spot on. And of course even then it's little solace for the 55% that someone else is keeping up
vk6flab 3y ago
In Australia the ACS (Australian Computer Society), "the professional association and largest community for Australia's technology professionals" is telling the world that the median hourly rate of $57.08 is too high and that professionals should expect "rebalancing" after the pandemic. For context, inflation adjusted, in 1998 (25 years ago!) when I was a generic IT help-desk operator at a local University I was earning that rate. So, apparently in ICT we're earning too much and we should be happy about it. Source: https://ia.acs.org.au/article/2023/it-teams--salaries--rebalancing--after-pandemic.html https://ia.acs.org.au/article/2023/it-teams--salaries--rebal...
ssss11 3y ago
Only 55%? The other 45% (minus those CEO’s getting 16% pay rises) are either ignorant or extremely lucky.
DanielHB 3y ago
The main reason for wage suppression is more tied to the country wanting to intentionally devalue its own currency through inflation because of recessions (or fear of recession). Devaluing the currency and wage suppression are done in order to make exports more profitable for companies so they can start growing again (or prevent them from going bankrupt during a recession) and to later reinvest to trigger economic growth again. At the same time also to reduce the number of imports due to them being more expensive due to inflation. It is all about rebalancing the trade deficit. Wage suppression is a well known way to get economies out of a recession, it is not necessarily a way to fight inflation (the inflation, to some extent, is desired in order to devalue your own currency). After the recession is over there is usually a period of market imbalance where new hires get inflation-adjusted salaries and tenured employees either eat the loss or are forced to move jobs to get competitive salaries again. But yeah, it is the peons (wage-earners) who get screwed at the end, asset-owners (people who own stocks, property or companies) mostly get to ride it out unscathed.
AmpsterMan 3y ago
Anectdotal: I got a raise after two years working for my current company. It's nice, to be sure, but it doesn't cover inflation according to the BLS inflation calculator.
drewcoo 3y ago
Why is the story talking about feelings alone and not what we can actually measure: raises in salary vs COLA? Spoiler: because it's a puff piece.
throwaway5959 3y ago
Haven’t gotten a raise in three years (so probably 25% down in purchasing power). If I made less and had more expenses, I would be pissed. Can’t blame others that are.
haunter 3y ago
Mr Burns: Excellent... that's how it was meant to be
jaygray0919 3y ago
Inflation is a government policy. It is a method to deflate the real value of government debt. Like many government policies, unintended consequences generate headlines about how one policy negatively affects part of a society that another policy is working to protect. At a macro level, government debt can only be resolved two ways: increase taxes to meet maturing obligations; reduce the real value of the obligations via inflation (and/or a combination of the two). Future economist will have two national debt policies to analyze: Germany (with its constitutional low-debt mandate) and US which discovered over time that it could issue debt at far greater amounts than previous economist ever thought possible.

70 points by MoBarouma 3y ago

Only 55%? I guess this is US only (but doesn't say so...)

You got still robbed, even if you did get a pay increase at the end of the year. They measure the increase in prices over a year and sometimes increase pay to match it But you have already worked a year for the lower salary. It would be fair if the pay increase is slightly higher than the inflation.

prepend 3y ago
I think “robbed” is a bit hyperbolic. Pay isn’t linked to inflation directly for a reason. Not everything I spend my pay on is affected by inflation, especially not in real time. It’s possible to run your own business and link directly to pay and real time profits. But the exchange for not getting weekly pay increases to match inflation is that we don’t get drops when companies lose money. Pay isn’t linked directly to purchasing power and is really a market function. Companies pay as little as they can pay and workers work for as much as they can get. Obviously this is simplified and macro, but my point is that pay is based on need, but on availability. I wouldn’t want a “fair” system that only paid me based on inflation and other factors.

qeternity 3y ago

If pay kept up with inflation, then inflation would never subside. Sometimes real wages are grow, and sometimes they shrink.

cycomanic 3y ago
Except that inflation this time was not really driven by wage increases (many had very small increases if any throughout covid), what grew massively is corporate profits.
faeriechangling 3y ago
Sure inflation would never subside, but people would still be more able to afford things if wage increases outpaced inflation. Wage increases and inflation are sort of inevitable right now because capital is overvalued. All these schemes to try and control inflation by suppressing wages are bound to fail. The people who are extracting rents on the economy need to have their rents reduced and inflation naturally eats into those rents. The problem isn't that people at McDonalds are making too much money, they are still making a pittance after all the wage hikes, the problem is unproductive rent seekers.
PaulRobinson 3y ago
That's a myth.
ssss11 3y ago
With inflation though some one/group is making the extra money. Assume for a moment it’s the wealthy as they own assets, shares in companies etc. The argument that “if regular people got pay rises it would fuel inflation” may be true but it’s no solution to our wealth inequality issues, and so presumably the cycle of the wealthy getting wealthier and the rest of us getting poorer should just continue?

jstummbillig 3y ago

Over the last 10(?) years pay increase was ahead of inflation. Mind you, that's just an observation – but I don't understand why pay keeping up with current inflation would even be the expectation? These things are not synchronised, in either direction.

fbn79 3y ago

It's good, it means we are not going in an wage-price spiral https://en.wikipedia.org/wiki/Wage-price_spiral https://en.wikipedia.org/wiki/Wage-price_spiral

PaulRobinson 3y ago
This proposed explanation is a myth. Profits - often created through the use of investing cheap money (and therefore the creation of more money) - drive inflation. Wages do not. OECD have shown this to be the case thanks to the recent handy experiment in the form of a pandemic arriving after a period of quantitative easing and very low interest rates in the UK.
dan_mctree 3y ago
There are various things that go into inflation, and wages are only a small part of it. Wage price spirals are very unlikely and have not been demonstrated. Wages are not 100% of the cost of products, so even if companies directly increase product prices exactly by labor cost increases, the product prices would not increase by as much as wages did. More likely causes for system wide inflation generally lie in limited substitution options for people. If they have to buy from limited options, either because of a lack or supply or because of monopolistic behavior, prices can be jacked up as undercutting is of no concern. This can happen both at the finished products level, or somewhere in the chain. E.g. the cost of gasoline goes up due to lack of alternatives and since it is used by companies making and transporting many types of products, prices go up everywhere.

mathieuh 3y ago

In the UK I haven't had a pay increase anywhere near inflation since 2019. I've had to move company twice since then in order to maintain or increase my standard of living. I'm now making 65% above what I was making in 2019, whereas if I'd taken the pay increases offered I'd be making 13% more right now than in 2019. Considering prices in the UK are 22% higher than they were in 2019 that's pretty bad, and IT is a well-paid industry, so you can imagine what it's like for people on lower wages.

WentFullRetard 3y ago
[dead]
nly 3y ago
Same here. Jumped ship in late 2021 for a 50% pay increase. Haven't had a pay rise with new employer since. They have one more chance this annual review cycle or I'm jumping again. My monthly mandatory expenses (excluding mortgage, since it's fixed for now) have crept up 15-20% this year. Just renewed my home insurance it's gone up 40% since Dec 22 In 4 years I'm expecting my mortgage payments (my biggest expense) to increase at least 30%. We're pretty comfortable, and think we stay off the hedonic treadmill as much as possible, but looking to start a family and I have a lot of financial anxiety despite a decent 6 figure salary in London Total (not marginal) tax burden on my salary is >40% and getting worse every year due to fiscal drag.
doix 3y ago
The UK is insane. I left in 2020 and came back to visit recently, things are over 50% more expensive. I used to buy 20 chicken nuggets for £4, it was £6.50 or something. Pints are £7+ instead of £4. I stayed with a friend and he kept his flat at 15c because heating beyond that was too expensive. I used to keep it at 18 and didn't even consider the costs (once I stopped being a student). I appreciate that the 22% more expensive is on average, but the things that I care about have gotten significantly more expensive. It really killed any desire I have of ever moving back there.
- 15457345234 3y ago

PaulRobinson 3y ago

The argument often used by governments is that pay rises drive inflation, so must be supressed in order to pull inflation back down. Problem is, that's not entirely true. The OECD[1] looked at whether workers, business or governments had contributed most to inflation, and the data revealed that in the UK at least, business profits were most to blame. If wages don't drive inflation, and profits do, you can lower inflation, increase quality of life and create a more equitable society by putting pressure on business to pay their staff more, and have smaller profits. Of course that won't happen, because we're now living in a dystopian Ayn Rand/Margaret Thatcher-inspired wet dream, so y'know, be safe out there and godspeed. [1] https://www.oecd-ilibrary.org/sites/ce188438-en/1/3/1/index.html?itemId=/content/publication/ce188438-en&_csp_=f8e326092da6dbbbef8fbfa1b8ad3d52&itemIGO=oecd&itemContentType=book#figure-d1e804-6539cc9538 https://www.oecd-ilibrary.org/sites/ce188438-en/1/3/1/index....

Dalewyn 3y ago
The problem with raising pay across the board is that it reduces the value of money. Everyone is making $15 more? Great! Now everything is $15 more expensive to make up for the loss in currency value; more money in circulation means each dollar and cent is worth less. This is then compounded because most business have no reason to not just offload the cost of increased pay onto the customers, who also got increased pay from their work. So by increasing pay, money and manhours both lose value while the value of goods stay the same. To be clear: Increasing pay is one of many levers that can be pulled to address inflation, but just increasing pay is not going to address inflation (and will likely make inflation worse).
- WD40forRust42 3y ago
  >The problem with raising pay across the board is that it reduces the value of money. No, printing more money to make more loans and bail out the crony financiers causes a reduction in money value.
Sankozi 3y ago
"If wages don't drive inflation" They do. "you can lower inflation, increase quality of life and create a more equitable society by putting pressure on business to pay their staff more, and have smaller profits" If profits are high, then it means that prices are too high. To reduce inflation you need to lower prices, not to redistribute profits from (too) high prices.

jgilias 3y ago

And headline inflation is just one part of the story. Broad money growth has averaged around 7% for decades for USD, similar for other ‘stable’ currencies, and much worse for the ‘not so stable’ currencies. If you’re rich enough, you won’t keep your value in cash, but rather will buy some assets using it (equity, property, whatever). If you’re rich enough and smart enough you’ll have realized that you can take loans to finance asset purchases in effect shorting the currency. However, if you’re not rich enough, depend on your wage, and can’t short the currency by buying up assets, you get the short end of the stick. Some say this is by design. I recently read an article in the Economist arguing how income inequality has actually gotten better in the rich world. They argued that the wage gap between blue collar and white collar workers has been shrinking. I expect that to accelerate with the advent of AI. But the wage gap says less and less about income inequality when the society gets divided into owner and wage bound classes.

faeriechangling 3y ago
The wage gap was always nonsense meant to get people angry at the working class over inequality not caused by the working class. Notice how governments never spread propaganda about the WEALTH gap or insist wealthy people redistribute their assets to various minority groups. When governments focus on the evils of wages and ignore wealth, just understand they're trying to stoke hatred and prejudice between poor members of various identity groups to distract people from the fact that the wealthy are fucking everybody.
- globular-toast 3y ago
  Bingo. I'm not sure where you're from but it's especially bad somewhere like the UK where income tax rapidly approaches 50% once you get above median income. There is simply no way for people who start with nothing to leave the rental class. When you look at rich people, they inherited it. Doesn't matter how well they did in school or how hard they work. Another major pain point is how much more tax effective it is for everyone to work as opposed to families having a single income. Basically you only get to take advantage of both partners' tax allowance if both work, meaning people who have to work (renters) have to work even more and probably live off copious shite food like microwave meals or eating out which costs even more and have to pay for someone to look after any children and even walk their dog! The 99% movement had it right. What they didn't have was any actionable solutions to this problem, unfortunately. Now that's all been forgotten and people are more interested in issues like men vs women which tell us all men are screwing all women as opposed to the truth which is a few wealthy (mostly men) are screwing everybody.

TMWNN 3y ago

[flagged]

besil 3y ago

In Italy, salaries decreased from 1990. In all other countries they increased. https://www.reuters.com/markets/europe/why-us-italy-seeks-way-out-low-wage-economy-trap-2022-06-16/ https://www.reuters.com/markets/europe/why-us-italy-seeks-wa...

BelleOfTheBall 3y ago
Wow, this is grim. Especially in conjunction with the article highlighting an aging population. I'm guessing a lot of young Italian professionals move abroad as it offers better salaries?
- OfSanguineFire 3y ago
  Aging population in Italy is due to birthrates in Italy dropping before this trend reached other developed countries.
expertentipp 3y ago
Since like forever, 1600 EUR net monthly is a good salary in Italy. Hahaha, I'm joking - you'll never get indefinite employment contract in Italy. This can explain the invasion of Italian guys to post-Communist countries. In addition to earning slightly more, they're fucking their brains out there. In exchange we can visit Italy in summer, see their old people, be robbed in cafes, restaurants, hotels, or literally be robbed... quite miserable exchange.

fifilura 3y ago

> 55% of workers say their pay isn't keeping up with inflation If you apply strict mathematical interpretation to that sentence I guess that means that salaries are pretty spot on with keeping up with inflation. I.e the rest 45% implicitly says it keeps up with inflation.

dan_mctree 3y ago
Or not at all. If the 45% are exactly on the mark with inflation, then the average would be significantly below inflation. The 45% would have to significantly exceed inflation for it to be spot on. And of course even then it's little solace for the 55% that someone else is keeping up

vk6flab 3y ago

In Australia the ACS (Australian Computer Society), "the professional association and largest community for Australia's technology professionals" is telling the world that the median hourly rate of $57.08 is too high and that professionals should expect "rebalancing" after the pandemic. For context, inflation adjusted, in 1998 (25 years ago!) when I was a generic IT help-desk operator at a local University I was earning that rate. So, apparently in ICT we're earning too much and we should be happy about it. Source: https://ia.acs.org.au/article/2023/it-teams--salaries--rebalancing--after-pandemic.html https://ia.acs.org.au/article/2023/it-teams--salaries--rebal...

ssss11 3y ago

Only 55%? The other 45% (minus those CEO’s getting 16% pay rises) are either ignorant or extremely lucky.

DanielHB 3y ago

The main reason for wage suppression is more tied to the country wanting to intentionally devalue its own currency through inflation because of recessions (or fear of recession). Devaluing the currency and wage suppression are done in order to make exports more profitable for companies so they can start growing again (or prevent them from going bankrupt during a recession) and to later reinvest to trigger economic growth again. At the same time also to reduce the number of imports due to them being more expensive due to inflation. It is all about rebalancing the trade deficit. Wage suppression is a well known way to get economies out of a recession, it is not necessarily a way to fight inflation (the inflation, to some extent, is desired in order to devalue your own currency). After the recession is over there is usually a period of market imbalance where new hires get inflation-adjusted salaries and tenured employees either eat the loss or are forced to move jobs to get competitive salaries again. But yeah, it is the peons (wage-earners) who get screwed at the end, asset-owners (people who own stocks, property or companies) mostly get to ride it out unscathed.

AmpsterMan 3y ago

Anectdotal: I got a raise after two years working for my current company. It's nice, to be sure, but it doesn't cover inflation according to the BLS inflation calculator.

drewcoo 3y ago

Why is the story talking about feelings alone and not what we can actually measure: raises in salary vs COLA? Spoiler: because it's a puff piece.

throwaway5959 3y ago

Haven’t gotten a raise in three years (so probably 25% down in purchasing power). If I made less and had more expenses, I would be pissed. Can’t blame others that are.

haunter 3y ago

Mr Burns: Excellent... that's how it was meant to be

jaygray0919 3y ago

Inflation is a government policy. It is a method to deflate the real value of government debt. Like many government policies, unintended consequences generate headlines about how one policy negatively affects part of a society that another policy is working to protect. At a macro level, government debt can only be resolved two ways: increase taxes to meet maturing obligations; reduce the real value of the obligations via inflation (and/or a combination of the two). Future economist will have two national debt policies to analyze: Germany (with its constitutional low-debt mandate) and US which discovered over time that it could issue debt at far greater amounts than previous economist ever thought possible.