We need to stop talking about inflation and start talking about how WAGES ARE NOT GOING UP! Greedy corporations are not PAYING PEOPLE WHAT THEIR LABOR IS WORTH!
The problem is WAGE STAGNATION, not inflation.
In the US, average hourly wages have increased more since 2019 than consumer prices. But as always, focusing on averages overlooks the impact on the lowest paid workers and anyone relying on social welfare payments. These are the areas where income often falls behind prices and it’s why many people still feel like things are getting worse despite the grandstanding from governments about how great their economic management is.
the median household income in America has increased $6,000 since 1990
If this was adjusted for inflation, this increase would be $115,000
https://nces.ed.gov/programs/digest/d22/tables/dt22_102.30.asp?current=yes
Some inflation is a good thing. It keeps money moving, which is absolutely crucial to the system as it is. Wages do need to rise with or outpace it, though.
But I don’t like the system as it is.
The only way to save for retirement (within this system) is by exploiting other workers. I want overall consumption to decrease. I don’t like how every business is shortsightedly focused on “this quarter”. Inequality since the 1970s has skyrocketed.
This is a bad system.
Why?
Hear me out. If a $50k wages is $50k 10 years from now and all things stay the same why is that a problem? People at that wage can pay for a certain lifestyle at that wage forever.
Hear me out if all companies have a profit? Why have more profit next year? You can still grow you have profit.
Even loans still work as loans have profit built into them so what is the problem with stagnation
I agree that right now we’re facing both at the same time, but either one in isolation would still be a huge problem.
Inflation at the current (reported) rate of ~3-4% is healthy for almost any economy, since it promotes spending your money on high quality, long lasting goods, or investing your money to promote growth of businesses. A little depreciation of money each year dissuades people from sitting on their cash. Even without a stock market and capitalism, inflation is an incentive for people to put their long term savings into government savings bonds, which allows for more public development today without more taxes.
BUT if inflation is too high, (even with wages increasing at the same rate, which never happens) it’s extremely difficult for people to save cash to make large purchases. Any economy that uses money needs for people to be able to afford to wait a while with their money before deciding what to do with it, otherwise people are forced to settle for lower quality goods or whatever investment opportunities are available on short notice. Less time to make wise choices with money means less productive use of that money, meaning a less productive economy overall. Not what we want.
And of course, if wages don’t keep up with inflation, either because inflation is running away or because your government has refused to increase the minimum wage at all since 2009 when the national currency was worth 1.47 times as much as it is today, 15 years later (cough cough), then obviously you’re going to run into some problems with people’s ability to afford things.
That said, I think some shady manipulation to the consumer price index is going on to make the reported inflation figures look a lot lower than the actual increase in cost of living that the majority of people are facing. The biggest offender is housing costs skyrocketing in the past decade, but not uniformly across the US. The result is that areas where this hasn’t been nearly as big of an issue falsely “balance out” critical problem areas, where people are practically being forced to either relocate or become homeless due to how rapidly housing prices have gone up.
There’s just so many different things that need to go right for an economy to be prosperous for everyone who contributes to it, and right now the people in charge of steering that economy are getting kickbacks from the people who stand to benefit the most from taking it off the rails.
We saw a huge raise in wages during the 15minimum push. Still hear the same complaint about not being paid enough. Hell, billionaires get raises, so while I do think people should get more for the work they do (make a company money, earn more money), it definitely isn’t the only thing that has to change.
This is one way to own the lbs.
Why is this segregated by race?
I don’t think so? I’m posting in reply to a picture that describes how to calculate currency inflation in certain markets and I don’t understand how skin color has anything to do with that.
The name is a holdover from the alien site. The culture changed but the name never changed once it got to Lemmy, and it’s not actually about “white” Twitter anymore, just Twitter in general. That’s how it’s been explained in other posts, I’m not exactly a frequent flier in these parts.
Hey, I was told that everything that goes up must come down. So where the hell is the deflation?
I know this is a joke but deflation can be scary too. Basically if it becomes a pattern then consumer spending will crater since people know if they wait their money will be with more in the future. Obviously this effect is less on stuff people have to buy to survive but it’s still not desired.
Consumers are not going to wait months/years for the real value of their money to increase. They want their gender affirming pickup trucks now.
It hurts the government most because of the debt load it has accumulated, and that is why there is such a strong interest in assuring that deflation never occurs.
True about loans. Inflation benefits all debtors, not just the government. So poorer people who borrow benefit from inflation more than rich people who lend. As others have said, stagnant wages are the real problem.
Regarding deflation, people living in deflation actually do delay purchases. That’s why the deflation persists. There is a cycle that happens where delayed purchases reduce business sales, which causes layoffs. That causes people to delay more purchases.
In your truck example, someone would definitely delay that purchase if they lost their job.
Yeah inflation means noone can afford stuff but there is almost maximum employment
Deflation results in a lot of stores shutting down since noone is buying anything anymore
High inflation can mean noone can afford more expensive stuff, too, and that those shut down - but generally it’s a better idea to have a small amount of inflation
So where the hell is the deflation?
Japan experienced a long term period of deflation during its “Lost Decade”. China’s currently in a deflationary spiral, which kicked off in 2023 and ran for most of the year.
China is a perfect example of an economy with deflation or dangerously low inflation. In 2023, China recorded a successive series of declines in its CPI, which began to fall in January 2023 and continued till July 2023, dropping from 104 points in January to 102.7 points in July. CPI improved for the next two months but dropped again in October and November 2023. In December 2023, it marked the longest streak of CPI declines in China since 2009. Similarly, the producer price index (PPI) has been in contraction for more than a year. According to Bloomberg Economics, the biggest contributor to the decline in CPI in China was falling food prices as the food prices plunged for six consecutive months from July 2023 to December 2023, dropping from -0.155 to -0.618. Among food, pork prices saw the biggest decline which plunged 26% in December 2023.
Another big economic issue in China is its property market crisis. On January 30, The New York Times reported that China’s home sales dropped by 6.5% and real estate development plunged by 9.6% in 2023, as per the Chinese investment bank, Dongxing Securities Corp Limited (SHA:601198). In December alone, property sales were down by 17.1% year-over-year. The chief economist at Natixis, Alicia Garcia Herrero said the property market has not touched bottom yet. Herrero emphasized, “There is still a long way to go.” The property market crash in China has impacted many firms and over 50 Chinese property firms have defaulted on debt, including the two market giants: The China Evergrande Group (OTC:EGRNQ) and Country Garden Holdings Co Limited (HKG:2007).
Thailand, Libya, Jordan, Bolivia, Azerbaijan, Saudi Arabia, Denmark, Italy… Export-oriented countries can periodically find themselves glutted with their own surplus when supply lines break down and foreign markets fail to absorb the excess.
Shouldn’t be a surprise that China, being a global export leader, is caught in the thick of it due to the emerging US/China trade war and the shut down of the Suez Canal.
This is why we need to teach people calculus. At the very minimum - derivatives.
wait til they find out that the derivatives market is vastly larger than the stock market itself.
I’m not sure if you’re joking, but those are two different types of derivatives.
