The problem is both...
2 years ago by The Picard Maneuver to c/whitepeopletwitter
explodicle 24 points 2 years ago
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.
jorp 21 points 2 years ago
a lot of important and good things we can do for climate change like consuming less could make the GDP go down, so you know they'll panic and find ways to incentivize more consumption if so.
We need to get comfortable with economic degrowth.
Benaaasaaas 10 points 2 years ago
Wages can't really outpace it, well not for a long time. This infinite growth mentality is what got us here, both insane price wise and low wage wise, you have to somehow make number go up
BaldManGoomba 10 points 2 years ago
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
Wilzax 3 points 2 years ago
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.
thejoker954 3 points 2 years ago
What always gets me about this is the people "with" money dont actually tend to have that much of it. It's all 'invested' in other things like land and such.
So any inflation rate without wage increase just affects the usual suspects - namely those of us who don't have money to spend nevermind save.
So in the end it just ends up being a lie sold by the exploitive elite just like trickle down economics.
hperrin 9 points 2 years ago
I would argue that averages actually don’t mean dog shit, and that they’re only used to pit the proletariat against each other. There is an absolute minimum someone can make, but there is not absolute maximum. At least not yet.
jupiter_jazz 4 points 2 years ago
I just know mine ain't going up
AShadyRaven 3 points 2 years ago
the median household income in America has increased $6,000 since 1990
If this was adjusted for inflation, this increase would be $115,000
Freefall -1 points 2 years ago
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.
cpw 22 points 2 years ago
Price decreases are actually negative inflation and have all sorts of whacked out effects on an economy. It was a concern during COVID due to the huge drop in consumer spending forcing some prices to start to decrease.
kautau 18 points 2 years ago
Right, but the messaging doesn’t teach consumers that, it’s just “I’ll lower prices, vote for me!” But regardless, the fact that corporations are so driven towards quarter over quarter growth and immediately fail upon needing to lower prices demonstrates how broken the free market is
Asafum 22 points 2 years ago
In another 20 years business school is going to be SUPER easy.
One class: Number Must Go Up Always.
Lesson 1: Number go down? Fire as many people as possible that aren't executives.
Lesson 2: Number still go down? Cut quality.
Lesson 3: Number stillllllll go down? Buy competition, repeat lesson 1 and lesson 2.
Profit.
ryathal 2 points 2 years ago
Price decreases as a result of the value of money increasing are negative inflation. Mmt proponents seem to have corrupted the definition to be any price increase is inflation and any decrease is deflation though.
ConHoliousDonFrankle 56 points 2 years ago
As I explained to my boss, you are paying me less if inflation has gone up, and I didn't get a raise to at least match the rise. Bro started to explain to me how any child would run a lemonade stand with this piggy look in his chubby eyes. Business Budda needs a punch to the gut.
thejoker954 10 points 2 years ago
This.
Dont fucking piss on me and tell me its raining.
Kecessa 52 points 2 years ago
It's an issue with how inflation numbers are reported and I continue to believe that it's done intentionally to confuse people (or reassure them).
It's reported year on year but people don't plan their finances year on year, they think back further than the last year so inflation should be reported both year on year and with a reference year.
It's funny that other economy stats are actually reported in comparison to major events but not inflation. "The economy has improved X% since the 2008 financial crisis!" is the kind of things that's getting reported, well, inflation should be reported the same way. How much has it increased since January 2020? That's what people are feeling right now, not the 3% since August 2023.
driving_crooner 20 points 2 years ago
It's specially a problem in the US, and other selected third world countries, where they don't have yearly minimum wage increases to offset inflation. I live in Brazil, and I get a raise that is always higher to the yearly inflation (thanks for my union), so yes, things are higher as ever, but my salary too.
ArmoredThirteen 13 points 2 years ago
I'm in the US, I've got a solid job, everyone I know says I'm lucky to get raises every year. My raises are still consistently slightly under inflation. Lots of the people I work with don't understand why that means we're not actually getting raises, and nobody wants to rock the boat and risk the small amount we do gain each year. It's wild over here
Kecessa 1 point 2 years ago
Annual adjustment or annual + step increment?
Long term the annual adjustment will usually track inflation or be pretty close to it but until you've reached your last step you get two wage increases a year so it feels like you're beating inflation...
driving_crooner 2 points 2 years ago
Sorry, don't understand the difference. In Brazil the raise is usually signed in March, but retroactive to the beginning of the year. Is negotiated on base of the past year inflation, so technically we're always behind, because we get the rise at begging of year, but inflation is a constant process. There's something I find bullshit and is that the raise is rated by the time you worked on the past year, so if you start working in July, you only get 50% of the negotiated raise. Not sure if it general or something stupid in my union contract.
Akagigahara 2 points 2 years ago
I think what they meant is if you receive that raise capped or uncapped. Some places have set wage increases based on years worked until a certain ceiling.
So if you have this annual increase and that capped increase at the same time, you might only beat it because of the additional capped increase. That would mean, at some point, your increase in wages will not catch up with inflation anymore
Kecessa 1 point 2 years ago
So in most collective agreements I'm used to you have your classification (the job you have) and that classification has multiple pay steps depending on how many years you've been in that classification (usually going up every anniversary of you being in that classification) and the annual increase is separate thing.
When you first get hired you usually start at step 1 and go up once step every year while also getting the annual increase so it feels like your salary increases a lot more than inflation, but once you've reached the last step all that you get is the annual adjustment that's usually about the same thing as inflation, sometimes a bit less sometimes a bit more...
Here's an example:
Every June 1st you get a raise, but you also get one every anniversary for the first four years so it seems like your salaries increases by a lot during that time. Someone hired June 2nd 2017 would go from 61969 to 84045 after four years but someone that was there since 2010 would go from 77764 to 84045 during that time because they had already reached the last step.
anarchrist 7 points 2 years ago
Well then people might start asking questions like why X is up Y% but the ingredients for X have only gone up Z% in total
Serinus 2 points 2 years ago
They think people are too dumb to understand that zero is not the target for inflation. They want to make the good news they're reporting sound like good news.
You can disagree with their approach, but where they're coming from makes sense. After all, the OP in the screenshot exists.
31337 1 point 2 years ago
I think it's reported that way because traders and other people adjacent to the financial sector are trying to figure out when the Fed is likely to lower rates. I don't really see inflation numbers reported outside financial articles.
PoopingCough 49 points 2 years ago
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.
hannesh93 29 points 2 years ago
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
theneverfox 4 points 2 years ago
That's just because you don't understand economics well enough
See, we print extra money when we create debt, which is a great big brain way to scale a very stable and very logical system. It scales with debt, which is basically wealth, right? And as long as everything always grows, people and enterprises are essentially taxed by the banks for everything that produces the underlying things money represents the economy grows. And everyone knows you either grow or die, that's just basic biology... Why do we need a system that makes money after we're dead?
How else would you do it? Have the government print money? How would they know how much to print? Math? Economics are too complex for math, otherwise the economic models I believe in religiously would make accurate predictions.
The solution is obvious - we just have to capitalism harder.
ieatpillowtags -1 points 2 years ago
And yet here we are, sustaining it. Unless you can convince anybody that won’t continue, you won’t have much luck arguing against it.
Pogogunner 18 points 2 years ago
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.
KevonLooney 1 point 2 years ago
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.
explodicle 1 point 2 years ago
Inflation benefits all debtors, not just the government. So poorer people who borrow benefit from inflation more than rich people who lend.
This is a common misconception.
When you take out a loan, the rate of inflation is added to the rate at which you borrow. Rich people have inflation hedge alternatives, but you don't have much credit alternatives. Because demand is less elastic than supply, this "tax incidence" falls on the poor borrower.
The only time this would help poor people is if the inflation is unexpected and thus not priced in already. But that can cause hyperinflation, which hurts everyone.
expatriado 10 points 2 years ago
yearly very rare in any given country, but looking at individual months, it can be seen sometimes in the wild, the footage is a bit shaky and low res tho
UnderpantsWeevil 5 points 2 years ago
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.
prowe45 31 points 2 years ago
To give the original question answer slightly more (probably unfounded) credit, there are a lot of people out there who know the basics of what inflation is, but also seem to have a fundamental assumption that in a "normal" economy, wages will also increase at the same pace as inflation, resulting in a net zero effect on a person's buying power overall. Even though, yes, things are always getting a little more expensive in absolute terms, they don't seem more expensive. So the answer to the question someone with those assumptions might have actually been trying to ask is that even if inflation returns to a "normal" rate, wages have remained stagnant for a long time and aren't keeping pace with inflation like they used to, so now things actually are more expensive in a relative sense.
Tar_alcaran 27 points 2 years ago
People really need to know what "rate" means.
Fermion 14 points 2 years ago
Or we should switch to talking about affordability indices rather than inflation. Inflation isn't a particularly informative figure for most people. What people really care about is the purchasing power of their income, not what the change in dollar value is.
callouscomic 17 points 2 years ago
I work with statisticians who also struggle to differentiate a decrease from a decrease in rate of increase.
PierreKanazawa 16 points 2 years ago
Second order derivatives mmmmmmmm
InvaderDJ 16 points 2 years ago
People don't understand this about inflation and it will disappoint them very soon once inflation is fully back to rates we saw pre-pandemic.
Grocery prices aren't coming down. Housing prices aren't going down. Utility costs aren't going down. The best we can hope for is for them to not increase as fast as they have the last four years and for the usual fluctuations in things like gas or electricity costs to fluctuate down more than up.
constnt 6 points 2 years ago
The best we can hope for is for them to not increase as fast as they have
That's what inflation going down means. Inflation is the rate in which prices increase. Saying "inflation going down" means that the rate prices increase is not as much. "Inflation going down" still means prices are increasing. People are confusing "inflation going down" with deflation, which means prices are decreasing.
InvaderDJ 4 points 2 years ago
Yeah, that's exactly what I mean. I don't think most people understand that, and it will lead to people losing faith in experts when they're told inflation is back to pre-pandemic levels but prices aren't.
explodicle 2 points 2 years ago
I'm not sure if you're joking, but those are two different types of derivatives.
EvacuateSoul 4 points 2 years ago
Not sure how you derived that.
UnderpantsWeevil 7 points 2 years ago
My baby boy was born at 8 lbs 4 oz.
Five years later he weighed 60 lbs.
Five years after that he weighed 110 lbs
Five years after that he weighed 130 lbs
Five years later he weighed 180 lbs.
Five years later he weighed 195 lbs
So his weight gain is down. But now he's a fully grown adult. When does shrink back down to the size of a baby?
The_Picard_Maneuver 3 points 2 years ago
I think the closest you'll get to that is when he starts a small economy of his own.
RizzRustbolt 2 points 2 years ago
Push is down.
Pull (which until the 80s was theoretical) is way up.
zeephirus 2 points 2 years ago
https://www.youtube.com/watch?v=jsU1AKrlc4U&t=101s explains how the politicians frame it
InEnduringGrowStrong 1 point 2 years ago
Replied under the wrong post?
wanderingmagus 2 points 2 years ago
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.
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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.
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