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Originally Posted by hitpausebutton2
Living in same world as you. Just if your going to raise prices for everything, then raise prices on wages too. Not doing this, creates huge wage and retail gaps. If inflation is up %2, then why isnt your check up %2 to keep up with the inflation.
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Quote:
Originally Posted by hitpausebutton2
How am i being overpaid? Doesnt matter where you work, you should get a COL increase no matter what. If market is up %x then you should get a pay check increase same %x is all i am asking. Many, many reports ( on here) that proves today salaries are far from being on par with adjust inflation.
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It would probably help if you understood Economics.
Paying 32 Million Marks for a loaf of bread in the Wiemar Republic was not an issue. If you were a printing press operator being paid 980 Million Marks/hour --and that's what they were paid at one point -- then 32 Million Marks for a loaf of bread was nothing. People actually went to work on pay-day carrying suitcases so they could carry all the money the received in wages.
I mention that, because contrary to your assertion, which is based on your lack of understanding of all things Economic, wages do rise, but only when two forms of Inflation -- Monetary Inflation or Wage Inflation -- exist.
Wage Inflation is rare. It only happened twice in US history, once from 1939 to 1942 when FDR levied Wage & Price Controls, and again in the period 1968-1970, when Nixon implemented a Wage & Price Freeze.
Wage Inflation occurs when wages rapidly rise in certain
specific industries or sectors of the economy. This is not the result of a general Demand for Labor. This is a sub-set of workers, maybe 10% to 25% of the work-force is affected. The other 75% to 90% of workers are not seeing their wages rapidly rise.
Wage Inflation generally results in rapidly rising prices for many,
but not all, goods and services.
Both FDR and Nixon erred. The correct course of action was to freeze prices only, and allow wages to rise until the peaked and then declined (which is exactly what happened anyway).
FDR's error was more egregious, because that is how your employer got control of your health plan coverage.
For all intents and practical purposes, it is impossible for Wage Inflation to happen again in the US. There are only two possible scenarios that would lead to Wage Inflation. One is a military conflict necessitating the draft, and it would require a least 12 Million to 15 Million workers to be removed from the work-force under the draft to cause Wage Inflation (and military conflict is what caused Wage Inflation from the period 1939-1942).
The only other possible scenario is the introduction of totally new technology -- a technology so radically different from all existing technology in every way, shape and form that it would fundamentally alter Society, and would create an extraordinary demand for workers to produce that technology, workers to install, service and maintain that technology, and workers as operators or end-users of that technology. That is what led to Wage Inflation in the period 1968-1970.
Wages do rise when Monetary Inflation exists, and wages rise at the same rate as Monetary Inflation.
Wages
have risen in response to Monetary Inflation.
You might point out the federal minimum wage has not increased, but then not only do you not understand Economics, you don't understand the United States.
Iceland, with a population of 379,000 people, has one economy, one labor market, one uniform Cost-of-Living.
The United States has a population of 320 Million; has 1,538 separately functioning economies; has more than 5,000 labor markets; and has 3,007 different levels of Cost-of-Living.
If you haven't figured it out, there is no uniformity in the US, nor could there ever be for any number of reasons.
In some of those 5,000+ labor markets, no one is paid the federal minimum wage. Everyone earns more than the federal minimum wage, because the Laws of Economics have produced a situation where the lowest labor cost exceeds the federal minimum wage, and because Monetary Inflation has resulted in wage increases.
However, in some of those 5,000+ labor markets, the real cost of wages as determined by the Laws of Economics is less than the federal minimum wage, but those workers are paid the federally mandated minimum wage, which is higher than the real labor costs.
In some of those 5,000+ labor markets, the real true minimum wage is $4.65/hour, while in others it is $5.43/hour and in others it's $6.70/hour and still in others it's $7.11/hour.
Over time, changes in the labor market due to the Supply & Demand of Labor, Monetary Inflation and changes in Cost-of-Living due to Cost-push Inflation and Demand-pull Inflation result in the real true minimum wage rising. And it will rise until it meets the federally mandated minimum wage, and then ultimately, it will exceed the federal minimum wage, as it already does in some of the 5,000+ labor markets.
While Monetary Inflation causes both wages and prices to rise, Demand-pull Inflation results only in price increases.
When the government reports "Inflation" it makes no distinction between Monetary, Demand-pull or Cost-push Inflation, and aggregates them.
That's a very bad practice. In fact, the Federal Reserve's misinterpretation of Inflation data caused the 1952-53 Recession. Inflation was running at 10+%, but the Federal Reserve ignored the fact that it was 1% Monetary Inflation and 9+% Demand-pull Inflation and started increasing interest rates. That put the brakes on business operations and expansions, but it had no affect on prices, which continued to rise until the cease-fire went into effect July 1953.
If you read CPI-U or CPI-W for June, you'll find that gasoline prices increased, while electric energy, home heating oil and natural gas prices decreased. That's irrefutable proof of the absence of Monetary Inflation, because if Monetary Inflation existed, then all prices would rise at the same rate as Monetary Inflation. Prices increased, remained unchanged or decreased for food, clothing and dozens of other items, which again proves the absence of Monetary Inflation.
What you're actually seeing is Demand-pull Inflation, not Monetary Inflation.
The CPI-U/W only surveys 83 of the 1,538 separate economies in the US, and it is an average, meaning that some of those 83 economies experienced higher rates of Demand-pull Inflation, while others experienced lower rates.
To suggest that everyone should get pay increases is totally absurd, because not everyone is experiencing Demand-pull Inflation, and some are actually seeing price decreases.
It's absurder still, because Demand-pull Inflation is a built-in safety mechanism in the Laws of Economics.
Demand-pull Inflation results in rising prices, which forces people to curtail their consumption.
The fact that you can't afford things you previously could tells me the inviolable Laws of Economics are working exactly as they should, and you would know that, if you understood Economics.
Demand-pull Inflation protects resources from being depleted, and stops the overuse or over-consumption of goods and services.
Wage increases only accelerate the depletion of resources and the overuse or over-consumption of goods and services, resulting in continual price increases that get bigger and bigger at faster rates. No matter what you do, eventually price increases will out-pace wage increases, and then you'll reach a point where you won't be able to increase wages, but prices will still rise.
If you don't like it, then increase Supply to exceed Demand, so that price increase halt, and prices start to decline.
If you're not willing to do that, then grow your own food, make your own clothes and assemble your own cell-phone and TV from parts you make, because you're not entitled to anything.