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Those are real wages. We would expect to see that during a sudden jump in inflation. Wages tend to lag inflation. The other interesting part in that article is
by giantg2 5mo ago
Those are real wages. We would expect to see that during a sudden jump in inflation. Wages tend to lag inflation.
The other interesting part in that article is that excluding fuel and food still shows 2.8% inflation - only 1% attributable to food and fuel. Makes it seem like the main article and this article have different spins.
Edit: Wow people are jumping on this. The point is that food and fuel increases account for about 26% of the overall inflation number, meaning that the bulk of inflation is not related directly to fuel. The original article makes it it seem different.
- stuaxo 5mo agoAh fuel and food - those classic unimportant things.
- jcranmer 5mo agoFuel and food are excluded from core inflation not because they're unimportant (they are in fact incredibly important) but because they are much more volatile in price--going up and down in bigger increments--so that you get a more stable view of inflation by excluding them.
- array_key_first 5mo agoBut it's a bit of a nasty trick because food, in particular, has inflated in price a lot the past 3 years. Some items, like sugar, are legitimately double the price they were.
- HumblyTossed 5mo agoFor most Americans (aka: not the top 5% like SWEs), food and fuel increases hurt a lot.
- hnthrowaway0315 5mo agoSWEs do feel the pain, too. Not everyone has a 200K+ gig. Especially for a big family.
- giantg2 5mo agoMost SWEs are not top 5%. The median is about $135/yr, and a significant portion of us make under that. The point was that a 1% increase in inflation due to food and fuel wasnt the end of the world. Does a 1% cost of living increase hurt? Sure, for many people on the margin of making ends meet it can be bad. For most people, $1 more out of $100 is survivable.
- WarmWash 5mo agoUsually from what I have seen, most SWE's partners are also in tech or "white collar adjacent" making similar money. Which makes a household income of $270k, putting them in somewhere around the top ~7.5%.
- giantg2 5mo agoI have seen some of that, but there is still plenty of non-tech partners, especially if the tech half is at a non-tech company. In my experience, the managers are the ones most likely to have a high earning spouse. It seems like most of the managers I know have a spouse making $100k+. I don't make as much as others, but I can't even imagine how good my life could be if my wife made the same amount as me so we had a combined income close to $200k. It's also kind of wild to think that 1 out of 6 households in the US is making $200k+. I get that many of them are in higher cost of living areas where wages are higher, but still WTF. On the other hand, it's something like 1 out of 4 households are making under $50k. Makes me wonder how many of those are retirees vs working age, and what the median household income would be for 25-55yo vs the entire population.
- lotsofpulp 5mo ago> Makes me wonder how many of those are retirees vs working age, and what the median household income would be for 25-55yo vs the entire population. https://dqydj.com/average-median-top-income-by-age-percentiles/ https://dqydj.com/average-median-top-income-by-age-percentil... > but I can't even imagine how good my life could be if my wife made the same amount as me so we had a combined income close to $200k. Outside of a VHCOL, $200k mostly buys you peace of mind, if you live modestly. You get to build savings to be able to say F you to your employer and maybe take time off and spend a few thousand without worry if a family member needs medical attention. Inside of a VHCOL, $200k merely helps you get a downpayment for a half decent home.
- AnimalMuppet 5mo agoI think you're misinterpreting that. Everything other than food and fuel went up 2.8%. Everything (including food and fuel) went up 3.8%. Therefore food and fuel went up more than 3.8%.
- blochist 5mo agoThis. Energy is up 17.9% and energy commodities (oil, gas, etc.) 29.2%. See the CPI release: https://www.bls.gov/news.release/cpi.nr0.htm https://www.bls.gov/news.release/cpi.nr0.htm.
- b40d-48b2-979e 5mo agoTherefore food and fuel went up more than 3.8%. We can see that advertised on every corner, too. Gas costs for me locally went from $3 pre-war to over $5 now. My "investment" in EVs and solar is feeling really good right now.
- giantg2 5mo agoI think you're misinterpreting me. The overall inflation increase attributed to food and fuel increases is 1%.
- AnimalMuppet 5mo agoI still don't think that's right. You have food and fuel, which is some fraction of the economy - call that F. You have a rate of inflation in fuel and food - call that f. And you have a rate of inflation in everything else - call that e. Then you have 3.8 = e(1-F) + fF. You also have e = 2.8. I think what you're claiming is that fF = 1.0, so that e(1-F) = 2.8. And I think that's wrong. When they say inflation apart from food and fuel is 2.8, they mean e, not e(1-F).
- giantg2 5mo agoYou're over complicating it because you don't need rates within subcategories when looking at the whole - e is given and f is useless. 3.8 - 2.8 = 1 The overall inflation is 3.8. Overall inflation without food and fuel is 2.8. The overall inflation attributable to food and fuel must then be 1 (this is different than rste of inflation within food and fuel as a category, f).
- pastel8739 5mo ago> only 1% attributable to food and fuel What do you mean by this? If adding food and fuel raises CPI by 1%, then the food and fuel prices have necessarily raised by _more_ than the combined 3.8%.
- giantg2 5mo ago"What do you mean by this?" Pretty simple - an overall increase of 1% inflation is attributed to food and fuel.
- mint5 5mo agoUmm okay so many other aspects of the cpi respond slower and this is a recent shock… Food and fuel are more sensitive and respond first. There’s been no time for the effects to really get into the others. And Food and fuel having huge jumps in inflation is major visible pain for consumers.
- giantg2 5mo agoYes, and that volatility is why economists exclude fuel and food from core CPI.
- wing-_-nuts 5mo agoI will say, this past inflation spike has completely broken the assumptions I had from 1970s economics that employers would raise their 'cost of living' raises to keep pace with inflation. My employer seems to think 2.5% is fine, as they've done it multiple years in recent past with only one extraordinary year netting 4%. I am now very skeptical of any so called 'wage price spiral'
- ajmurmann 5mo agoNobody gives you cost of living increases. That's not how a market works. You get cost of LABOR increases. These are related but only indirectly.
- triceratops 5mo agoEmployers pay you the least amount of money it takes to keep you from working somewhere else. It's always been true and it probably always will be.
- alistairSH 5mo agoEmployers will increase your wages just enough to keep you from leaving. With structural disincentives to leaving (medical coverage in the US), that is almost always a less-than-inflation amount. Do employers even call it a COL increase any more? My employer "rebranded" the annual raises as "merit increases" many years ago.
- kccqzy 5mo agoAll of my employers, current and past, have or had only merit increases. COL increases are unheard of.
- wing-_-nuts 5mo agoHow big are your merit raises, typically?
- kccqzy 5mo ago