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More and more people are feeling the Bidenflation pinch, but how in the hell can nearly half of those earning $100,000+ barely keep their heads above water?
Well, we are now retired so we no longer have a (barely) six-figure income, but I can easily see why many people in the $100k-$150k income range are feeling the pinch now IF they have two newer vehicles, recently bought a new middle-class home, and have two school-age children!
Back then (way before Biden took office), we were not living paycheck to paycheck, but if prices had gone up 10% (and from everything I have read, that is pretty much the actual inflation since twelve months ago), my husband and I would definitely have not saved anything -- and if we had any major unexpected expenses back then (meaning something that cost more than a thousand dollars or so), we would either have had to go into our savings or go into credit card debt, which is something we have not had for about 25 years now.
Last edited by katharsis; 03-04-2022 at 03:40 PM..
Yes what part of the country you live in does make a difference. But so does how you spend the money. I got married in 1972 and by 1980 we had 3 kids and one income. All our furniture and household items were hand me downs from family. Our first house was a fixer upper and the interest rate on the mortgage was 12%. Clothes for kids were passed around between friends. We owned 2 old paid for cars and often only one was running. When I didn’t have a car during the day the kids and I rode the bus.
We didn’t eat out and had no debt other than the mortgage. Vacation was driving 1k miles to stay with family. We always had a emergency fund and saved for retirement. We fixed up our house ourselves as we could afford it. I still remember how thrilled I was to buy my first new couch in 1982 and new small car with no options but a radio in 1985. The kids were in scouts and local recreational sports. No one wants to live within their means anymore until they can afford nicer things like we did and our parents before us.
These kinds of posts from older people never get old.
Younger people just don't get it -- and, of course, I am speaking generally. Until both my kids were in school full-time, we were a one-income family, and we certainly were not rich by U.S. standards.
This is not always true. If the equation is right, employers eat profit loss rather than going out of business/profit abolishment. It's a function of the supply/demand curve and the percentage of costs coming from labor at all points of production vs raw material cost. If what you say is true, then the wage/COL ratio would invariably be improved by everyone taking wage cuts (all the way to zero?). Fortunately, it's all corporate propaganda BS. There is some truth to your statement, but it's not that simple. Rather, a complex equation.
Why would an employer "eat profit loss"? That profit is the employer's pay. Why would an employer take the loss in pay rather than the employee? Over my nearly seventy years I have owned many businesses. This included one that was international. I have employed countless employees over the years. I know hundreds of very successful business owners. I assure you no successful business owner is going to voluntarily take a pay cut.
Their options are:
1. Raise prices and pass increased cost to the consumer.
2. Lower wages
3. Sell the business to someone willing to pay for and operate the business at a lower profit margin.
4. Liquidate the business.
5 Business owners who are unable to walk away, may take a pay cut, but not if they can help it.
6. Declare bankruptcy and move on.
People believe any profit is good enough for the business owner. This is not true. The amount of profit must:
1. Justify the financial investment in the business.
2. Justify the time the owner must devote to the business.
3. Justify the long term risk of financial loss due to lawsuits, hazardous materials, changes in regulations and many other factors.
Just as no employee will work at an absurd low wage, no businessman/woman is going to invest large amounts of time and money for a small profit. Maybe a a small business owner heavily in debt and unable to walk away would choose option 5, but a successful owner of a large business owner will not. They will retire or liquidate and find another business venture. You haven't lived until you try to sell a big business making small profits, which is why large companies often close. Finally the financially strapped small business owner is not likely to have many employees.
I would never invest my money in a business that paid me the same amount of money as my employees. I go get a job working for someone else and let my employer have the stress of the financial investment and operation of the business if I was just going to make employee wages. Business ownership is hard and stressful work.
Higher wages mean higher prices or closed businesses almost 100% of the time.
More and more people are feeling the Bidenflation pinch, but how in the hell can nearly half of those earning $100,000+ barely keep their heads above water?
Why would an employer "eat profit loss"? That profit is the employer's pay. Why would an employer take the loss in pay rather than the employee? Over my nearly seventy years I have owned many businesses. This included one that was international. I have employed countless employees over the years. I know hundreds of very successful business owners. I assure you no successful business owner is going to voluntarily take a pay cut.
.
The movie, "Company Men" was an eye-opener for me. Great cast, btw.
More and more people are feeling the Bidenflation pinch, but how in the hell can nearly half of those earning $100,000+ barely keep their heads above water?
I am sitting here watching the news that is reporting the huge unprecedented demand for spring break travel, despite inflation. Miami, Orlando, the Gulf Coast and Hawaii are the hot spots.
Due to demand, lodging prices in some areas have doubled.
Spring break includes families with children, not just young adults.
According to this, nearly 40% plan to travel during Spring Break, up from 29% in 2021. Vbror reporting a nearly 50% increase in demand compared to 2021.
I honestly think if people knew how bad inflation was about to get, they wouldn't be traveling so much.
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