4 ms·

Rampant inflation caused by inept politicians will do that

verdverm 2y ago
Rampant would be more like the 70s into the first part of the 80s, more than a decade of inflation above today's levels. What we are seeing is the outcome of a global pandemic and the ad hoc responses to a once in a 100+ year event. Things could be worse, we never had the recession that was predicted
satvikpendem 2y ago
Politicians don't control the Federal Reserve.
- verdverm 2y ago
  They did pass a few major spending bills, putting large sums of money into the economy.
  - Vaslo 2y ago
    So you mean they gave people back their money?
    - verdverm 2y ago
      No, most of that money was not direct payments to people. Infra, energy, chips, and other broad effect investments More money in the economy means more inflation. You can take money out with taxes and slow non-govt debt based influx with interest rates (the fed's primary tool)
deleted 2y ago
[deleted]
hajile 2y ago
And massive minimum wage hikes driving up costs until they automate those jobs away.
- astrange 2y ago
  This folk economics is precisely backwards. Automation increases jobs. Realistic minimum wage increases (meaning ones people have actually tried in real life that we have empirical evidence of) don't lower employment in practice either - the limit seems to be about 60% of local median wages.
  - hajile 2y ago
    If automation didn't reduce labor costs and overall costs, nobody would do it. The jobs provided to the guys making the machines are paid less overall than the jobs they replace. Most modern jobs are so-called "bullshit jobs" where people sit around wasting time pretending they're doing something useful. This was not true before the massive electronic industrialization in the mid to late 20th century. You can argue that society is better for automation, but there are very few facts to support the idea that it increased productive jobs. If minimum wage doesn't affect employment, why not raise it to a million dollars per hour? Your assertion that it doesn't lower employment isn't factual except in cases where it is already lower than the lowest going rates or where it can be avoided (under-the-table jobs or contract work). In any case, the real minimum wage is zero. If your job is costed above what it is worth, the employer will eliminate it.
    - astrange 2y ago
      > If automation didn't reduce labor costs and overall costs, nobody would do it. The reason to implement automation (capital investments) is that it increases productivity, not to lower costs. Productivity improvements increase employment in an industry because they make the industry more competitive so it can grow. > The jobs provided to the guys making the machines are paid less overall than the jobs they replace. For interesting cases against this see "the invention of ATM machines increased the number of bank tellers" and https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox. > Most modern jobs are so-called "bullshit jobs" where people sit around wasting time pretending they're doing something useful. You'd think a supposed leftist author like Graeber would realize that "workers don't do useful work" is not a leftist thing to say and is basically agreeing with Ayn Rand. I recommend ignoring him. > If minimum wage doesn't affect employment, why not raise it to a million dollars per hour? You left out the conditions which I was very careful to state. A million dollars an hour is more than 60% of the local median wage. > Your assertion that it doesn't lower employment isn't factual This is the conclusion of all known empirical evidence. https://www.noahpinion.blog/p/why-15-minimum-wage-is-pretty-safe https://www.noahpinion.blog/p/why-15-minimum-wage-is-pretty-... > In any case, the real minimum wage is zero. If your job is costed above what it is worth, the employer will eliminate it. This is "econ 101", but you shouldn't think about labor economics until you know econ 201 or you'll get it wrong - standard theories also say that raising the minimum wage can increase employment, for instance due to monopsony effects (employers can set wages too low if they don't have better information) and search effects (eliminating bad jobs helps people find good jobs.) Of course that's not the only way to do it. Australia and Denmark have two pretty different good systems here.
callalex 2y ago
And yet the profit margins of fast food companies keep steadily and consistently increasing. Maybe the cost isn’t the issue, but simply greed?
- astrange 2y ago
  You can't explain something that changes over time with something that's always true. Does their greed steadily increase? When prices go down is that because they became less greedy? Doesn't look true anyway. https://ycharts.com/companies/MCD/profit_margin https://ycharts.com/companies/MCD/profit_margin

Rampant would be more like the 70s into the first part of the 80s, more than a decade of inflation above today's levels. What we are seeing is the outcome of a global pandemic and the ad hoc responses to a once in a 100+ year event. Things could be worse, we never had the recession that was predicted

satvikpendem 2y ago

Politicians don't control the Federal Reserve.

verdverm 2y ago
They did pass a few major spending bills, putting large sums of money into the economy.
- Vaslo 2y ago
  So you mean they gave people back their money?
  - verdverm 2y ago
    No, most of that money was not direct payments to people. Infra, energy, chips, and other broad effect investments More money in the economy means more inflation. You can take money out with taxes and slow non-govt debt based influx with interest rates (the fed's primary tool)

deleted 2y ago

[deleted]

hajile 2y ago

And massive minimum wage hikes driving up costs until they automate those jobs away.

astrange 2y ago
This folk economics is precisely backwards. Automation increases jobs. Realistic minimum wage increases (meaning ones people have actually tried in real life that we have empirical evidence of) don't lower employment in practice either - the limit seems to be about 60% of local median wages.
- hajile 2y ago
  If automation didn't reduce labor costs and overall costs, nobody would do it. The jobs provided to the guys making the machines are paid less overall than the jobs they replace. Most modern jobs are so-called "bullshit jobs" where people sit around wasting time pretending they're doing something useful. This was not true before the massive electronic industrialization in the mid to late 20th century. You can argue that society is better for automation, but there are very few facts to support the idea that it increased productive jobs. If minimum wage doesn't affect employment, why not raise it to a million dollars per hour? Your assertion that it doesn't lower employment isn't factual except in cases where it is already lower than the lowest going rates or where it can be avoided (under-the-table jobs or contract work). In any case, the real minimum wage is zero. If your job is costed above what it is worth, the employer will eliminate it.
  - astrange 2y ago
    > If automation didn't reduce labor costs and overall costs, nobody would do it. The reason to implement automation (capital investments) is that it increases productivity, not to lower costs. Productivity improvements increase employment in an industry because they make the industry more competitive so it can grow. > The jobs provided to the guys making the machines are paid less overall than the jobs they replace. For interesting cases against this see "the invention of ATM machines increased the number of bank tellers" and https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox. > Most modern jobs are so-called "bullshit jobs" where people sit around wasting time pretending they're doing something useful. You'd think a supposed leftist author like Graeber would realize that "workers don't do useful work" is not a leftist thing to say and is basically agreeing with Ayn Rand. I recommend ignoring him. > If minimum wage doesn't affect employment, why not raise it to a million dollars per hour? You left out the conditions which I was very careful to state. A million dollars an hour is more than 60% of the local median wage. > Your assertion that it doesn't lower employment isn't factual This is the conclusion of all known empirical evidence. https://www.noahpinion.blog/p/why-15-minimum-wage-is-pretty-safe https://www.noahpinion.blog/p/why-15-minimum-wage-is-pretty-... > In any case, the real minimum wage is zero. If your job is costed above what it is worth, the employer will eliminate it. This is "econ 101", but you shouldn't think about labor economics until you know econ 201 or you'll get it wrong - standard theories also say that raising the minimum wage can increase employment, for instance due to monopsony effects (employers can set wages too low if they don't have better information) and search effects (eliminating bad jobs helps people find good jobs.) Of course that's not the only way to do it. Australia and Denmark have two pretty different good systems here.

callalex 2y ago

And yet the profit margins of fast food companies keep steadily and consistently increasing. Maybe the cost isn’t the issue, but simply greed?

astrange 2y ago
You can't explain something that changes over time with something that's always true. Does their greed steadily increase? When prices go down is that because they became less greedy? Doesn't look true anyway. https://ycharts.com/companies/MCD/profit_margin https://ycharts.com/companies/MCD/profit_margin