It's funny stat because wages don't just go up every month/week/day. It's not like companies have a real time wage number they adhere to.
Meanwhile oil and gas prices shoot up and prices instantly increase for everyone in no time flat.
Wages will ALWAYS lag inflation in these scenarios and likely will lead to a recession which will continue to stagnate or even reduce wages.
2% is supposed to be the average that the fed is after we have to get it to near 0 in order to fix the past 5 years or excessive inflation.
Quite easy to solve with any normal administration. Higher taxes on the wealthy, fully funded and properly run government programs, no tariffs (consumer tax), and no wars with Iran lol. Edit oh and the obvious.. no trade wars with long time trading partners....
So simple really. Trump just had to do NOTHING and we'd be there. Economy would be booming as these new industries in EV and clean energy tech explode along with AI. Oil prices were headed lower because of oversupply. Still had a deficit, but we'd probably have our first real boomtime economy since the lower taxes of Trumps 1st term. Which means they could continue to kick the can.
It's truly mind boggling. Republicans were handed a gift and they just torched it. It's sad to see the senate and congress so weak willed. They know these things, they are aware of where this was headed.
A team sport with a dear leader is how they choose to act instead and we all suffer.
I heard presidents are supposed to give up businesses that elicit them more than the alotted 400k a year. Maybe they aren't forced to. Didn't Jimmy Carter give up his peanut farm to starkly avoid conflicts of interest? I feel like Trump has dome the reverse, and went brazenly neck-deep into conflicts of interest with no reservation.
How much richer is Trump and his family now, compared to before entering office?
It's always the same everyone sanewashes these presidents once their out of office. Because most people refuse to read and learn from history. Jimmy Carter was a Neo Liberal and started the destruction of the government harnessing corporations to benefit the American People.
Republicans torched it because they know if they did nothing, Biden would get credited. It’s easier for them to ruin it and blame it on Biden, to rile up their dumb as fuck base for the midterms.
To add, the fact that the federal government hasn't increased minimum wage since 2009 is a problem. There's zero pressure on business to increase the floor. States and municipalities have stepped in, but it's a localized mismash and not a clear signal to industry. It adds to the hoarding by corporations who continue to squeeze small businesses who find more barriers to market entry.
yup good point. Honestly a number of states have incorporated a higher min wage and this boomtime we were literally headed into those states would see added success from that move so much so that might even influence the federal government to do it. Like boomtime is the time to do this and just feed the growth beast.
So frustrating. Economically it was simple to lead us to another decade of growth.
That in combination with weakening worker and union protections as well. Republicans are trying to get back to the Lochner era were they ruled that even banning child labor was unconstitutional.
The cost of living differs enormously between states, so honestly a semilocalized version is probably better. States vary internally too, but the federal one is always going to be held back by states with low productivity and low costs of living. You would still end up with a system where like 40 or 45 states still need to have their own minimum wage laws, or the poorer states could end up with theirs set too high for their area and have a higher amount of the negative effects. $20/hr might be functional(ish) in San Francisco but would probably cripple rural areas.
A reasonable compromise might be to legally require states to review the minimum wage every 5 years or so and then vote on an increase with a higher threshold for no increase. That kills off the argument for a wage-price spiral by eliminating the automatic feedback loop and still keeps it from lagging indefinitely, while also making it harder to outright freeze.
> The cost of living differs enormously between states, so honestly a semilocalized version is probably better.
This misses the value that comes from the wages being near-equal in varying areas without regard for COL. It induces migration to those lower COL locales. This is an unmitigated societal good.
> so honestly a semilocalized version is probably better
Hard disagree. There currently too many people at the state level, and even some at th federal level, making moves to bring back child labor. Never mind failed policies like Brownbackistan that greatly put workers at risk. Nah, the federal minimum wage was instituted specifically because states weren't taking care of workers. Funny how quickly people forget the past.
And it was known corporations wouldn't take care of their people, either. If only FDR had made it longer, we may have ended up with his "second bill of rights" implemented.
> the fact that the federal government hasn't increased minimum wage since 2009 is a problem
But economists say we don’t have to worry about the federal minimum wage because the market will set the rate, and that the federal minimum wage is rarely the actual minimum wage due to states rights and all. And speaking from someone in WA, jacking up the minimum wage isn’t the complete answer - places have sadly not been able to pay the increased cost and the quality here is just not as good as Portland. Good for workers though
I think often about how much better the world would be if Trump had just spent the entire last 20 months golfing at Mar-A-Lago and doing literally nothing but sucking up a lil bit of tax payer money with his usual grifts.
Deep Red area here. This is impossible. Most people in Red areas fall at the feet of business owners and consider everyone around them competition. The more boomers at your work place the worse this is, too. We need nationalized health care, universal basic income, and nationalized sick pay.
You cannot depend on most workers to do this because they're flat out honestly too selfish, self-centered and toddler-brained to comprehend labor movements.
Most of the boomers will soon be retired — voluntarily or involuntarily— or dead, relatively soon. Many have already died. Many will die, sooner, due to unaffordable healthcare.
As for the red-hat MAGAts, many are beginning to feel the consequences of their loyalty to their employers, the GOP and their dear leader.
Not at all — but they have dissuaded many desperate people from taking militant actions to demand justice. Those governmental “benefits” are no substitute for well-paying jobs or Universal Basic Income.
Thats what I mean, they have sucked all of the oxygen out of the room that could have gave birth to unions. Just barely enough bread and circus to prevent the people from actually doing something about their crappy jobs (unionizing).
I use the mental image of a 1970’s style Nuclear Plant control room - they just ran in and started cranking knobs and pushing buttons, not keeping notes or records. What are the chances they can figure out how to get it back to anywhere near stable?
I am worried Trump's failed ideas are now baked into any Future Republican leaders. We will be dealing with this failure until the ideas are recognized as not worth doing ever again by all sides.
And they will never recognize them as such. I've been waiting for them to finally admit Reagan's ideas were wrong. That will probably happen before they admit so with Trump’s.
Let’s call inflation what it really is: a transfer of wealth from the working class to the ownership class. It’s by design. We are fighting a class war. The sooner people wake up and realize this the sooner we can start doing something about it.
> If you're implying the French revolution, it's quite unlikely
Based on the data available from US history, I'd say it is much more unlikely that we would even get to the point of inequality we have already reached. We've had a revolution, a civil war, and a complete reconsideration of economic relationships at the prior three local maximums - each of which was significantly less extreme than our current one.
I don't imagine this going any specific way. My point was a simple question to the person who suggested things aren't going to change unless bigly people end up dead
There is one group fully aware and as far as I know the only group actively doing anything about it. The DSA and they are very quickly gaining support much to the dismay of establishment democrats, the entirety of the Guardians Of Pedophiles and the mainstream propaganda machine disguised as news media.
Yes I agree. But college-trained traditional economists with very good credentials will come in and say “it is normal” and make us sound like angry leftists who don’t understand economics. I hate this so much.
One thing I hate is when my country’s economists keep cautioning against wage raises, saying it’ll trigger landslide problems afterwards etc etc, with a model to confirm that. While in reality we DID raise wages multiple times and none of that happened in the long run. Sure in the months that followed things will change and might be more expensive, but let it run and eventually everything got fine if not better.
If wage raises are so risky why our country (and most countries) never had an economic episode or crises directly caused by the raises? Like I never heard of “Rich Waiter Crisis” or anything like that. I tried searching “was there an economic crisis caused by wage raises” and nothing turned up.
We got into the inflationary environment we're in today due to money circulation but isn't that we raised wages across states in the past few years not attributed to inflation as well?
It feels like when I go to the grocery store, I have to do a double, triple check on prices with a pikachu shocked reaction causes prices seem to be increasing about every other week in certain products. It's not sustainable. It's untenable to the everyday average American with the way things are headed/going.
I think we're on the verge of an economic crises. It will occur before Trumps presidency is over or after the democrats take office, its most likely to occur after since Trump wants to inject even more money into the economy his is $5k check federal program.
If you aren't saving now for when the financial crises occurs, you better starts TODAY.
Raising wages causes inflation, but much lower as it is distributed across all customers. So you may raise the minimum wage by 5 dollars over 10 years, but that ends up being less than a dollar in actual cost per fast food customer. The economy also catches up eventually.
I get it. I think its boiling down to a few variables, such as greed, current political climate, and maybe even climate change baked into the overall economical landscape.
I think the intuition is roughly the correct direction, but poorly framed. Inflation hurts low income folks a lot more than rich folks.
If Elon Musk wants to eat steak it literally doesn't matter to his bank account whether that steak is $10 or $1,000,000. So the rich aren't really 'squeezed'.
Manufacturers of items are still mostly seeing profit margins expand. In a hypothetical where margins are constant, if you had an item selling for $100 in 2019, which has now doubled in price to $200, you have seen your per unit profit double.
All together this does transfer wealth to capital owners from the consumers.
> I think the intuition is roughly the correct direction, but poorly framed. Inflation hurts low income folks a lot more than rich folks.
Does it? The price of labour also rises due to inflation, meanwhile debt is nominal. If there are still real increases to wages then inflation will cause a wealth transfer from net creditors to net debtors as real debt burdens fall. That will benefit low income people more than rich people.
There are tons of dynamic effects but over a long time period there is ultimately an effect where inflation benefits net debtors. The idea of inflating the debt away applies to households too.
Rich people have much more debt than poor people https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Debt;demographic:nwcat;population:1,2,3,4,5;units:median;range:1989,2022 They benefit more in absolute terms and are less burdened by financing costs (both able to negotiate better rates and rates are smaller proportion of net worth).
Can you explain why does that matter? The rich are able to and do obtain more debt and buy more assets with it while the poor cannot. The more assets you own the more you benefit from inflation as asset values inflate. The more debt you hold the more you benefit from inflation as the value of the debt decreases. The poor may be more net debtor but they are still getting lapped in absolute terms by inflation driven wealth transfer and the inequality gap is driven higher.
Because the benefit of devaluing their debt is more than offset by devaluing their financial assets. Inflation eats away at all nominal values. The net creditors have the net impact of their financial savings getting devalued while the net debtors have the net impact of their debt being devalued.
>The rich are able to and do obtain more debt and buy more assets with it while the poor cannot.
This is always true regardless of any inflation driven effects.
>The more assets you own the more you benefit from inflation as asset values inflate.
Unless they're inflating at a greater rate than overall inflation then it's not a benefit, just keeping up.
>The poor may be more net debtor but they are still getting lapped in absolute terms by inflation driven wealth transfer and the inequality gap is driven higher.
The net debtor is experiencing a wealth effect that benefits them as they get less poor when their debt loses value in real terms.
I'll make an extreme example. If you're a lower income homeowner that earns $50k per year with a $300k mortgage and everything inflates (including wages) 100x in a single year, you now have a $5m per year income with an unchanged mortgage still at $300k (ignoring a year's worth of mortgage payments). Are you financially better off or worse off than last year? And is the bank or investor that ultimately owns that mortgage as a financial asset better off or worse off?
I think you're attributing other economic issues that are driving greater inequality to inflation.
That's assuming that capital owners are willing to take a loss on their profit margins. All else equal, they benefit more, as I tried to demonstrate in previous comment.
It has nothing to do with profit margins, which are nominal. Hold margins constant and inflation still eats away at real debt burdens. Net debtors win while net creditors lose.
It's the opposite of deflationary dynamics causing hoarding behaviour. If savings increase in real value year after year, then that's good for those with savings. Who has the most savings? Similarly if you're a net creditor in a deflationary environment then your financial assets just get more and more valuable every year. That's obviously good for you.
Our economic system may be an emergent system, but it's still constantly being nudged to favor the rich and powerful over the average person. It's not like there's a shadowy cabal who planned it all out, but it is a series of choices made over decades and centuries that led us to where we are.
There are very clearly outsized financial players who greatly influence the economy over others. Ignoring that with a hand wave is ridiculous.
Is there an annual meeting of evil elites plotting a strategy like the Illuminati? No. But Davos exists. And it would be silly to think the economically and politically powerful are not in contact through numerous means forming a loose framework.
An economy with trillions of variables and billions, but the asset owners are NEVER on the losing end, and politicians never implement policies that help the majority of citizens but will hurt the asset owners - but it's not by design.
Genuinely curious- don’t economists have a bias toward people who already have capital? I’m thinking rent control and minimum wage supposedly not doing anything, would rather not have corporate taxes than pay the worker more. Basically they’ll help with the things at the top, and then just say “well the laws and regulations need to distribute it” rather than just giving it directly to poor people. IME in the chase of answering efficiency questions, we keep handing out money to the rich instead of who is the most deserving of it.
I mean, not generally. There's hundreds of studies on inequality from reputable economists who critique capital accumulation. For example in the NYTimes, specifically on tech:
>Globalization and the weakening of unions have played roles. “But the most important factor is automation,” Mr. Acemoglu said. And automation-fueled inequality is “not an act of God or nature,” he added. “It’s the result of choices corporations and we as a society have made about how to use technology.”
>Paul Romer, who won a Nobel in economic science for his work on technological innovation and economic growth, has expressed alarm at the runaway market power and influence of the big tech companies.
>Anton Korinek, an economist at the University of Virginia, and Joseph Stiglitz, a Nobel economist at Columbia University, have written a paper, “Steering Technological Progress,” which recommends steps from nudges for entrepreneurs to tax changes to pursue “labor-friendly innovations.”
Their arguments are supported by a lot of data and research too, it's not just opinion.
>I’m thinking rent control and minimum wage supposedly not doing anything, would rather not have corporate taxes than pay the worker more.
On this particular point, studies on rent control suggest more negative than positive impact for those who the policy aims to benefit most (e.g. low income, minority groups etc) and reduces the flexibility of choice in housing and elasticity of housing supply. Oversimplifying, but effectively leads to a more static market, which doesn't really address the problems of high rents.
Minimum wage is more mixed, some argue that increases to min wage is broadly positive, other argue broadly negative and others neutral. Not an overwhelming consensus on this one. I'm also not super familiar with min wage studies, so take that with a pinch of salt.
Corporate (and I assume) wealth taxes is again a bit of a mixed bag, but generally high corporate taxes are viewed as somewhat inefficient and similar for wealth taxes. Not that they can't work, but that some studies have found a net-negative impact and others finding a marginal positive impact on government revenue.
But yes, on efficiency it is possible that something "moral" goes amiss, but that doesn't have to be the case. Economists can, and have, made arguments that both claim to increase efficiency while also making for a fairer society.
> There's hundreds of studies on inequality from reputable economists who critique capital accumulation…. Economists can, and have, made arguments that both claim to increase efficiency while also making for a fairer society.
Good to know! It doesn’t feel like that’s the mainstream take, or policies backed by these ideas are too popular. Thank you so much for this detailed breakdown. It is heartening that there are economists like Acemoglu (I’ve heard his name a lot, I’ll dig into a bit this weekend).
Economists don't inherently have certain politicial leanings. Like anyone, they might have different political goals in mind.
But if you want economic policies that help accomplish your goal, economist are the right people to look for. Find the ones you can trust, that are rigorous, that have reached a consensus.
Even left wing economists will agree for example that rent control is often detrimental. Read through their arguments, they are serious about helping the poor and they are writing these things for a reason.
You are making political decisions not economic ones. Economics are agnostic. You can say your economic policy and an economist will tell you what they think the result is. Not all economists agree. Though generally there are accepted principles. The left and right politicians pick economists who agree with them though usually they pick ones that are not mainstream.
> You are making political decisions not economic ones. Economics are agnostic.
You mean to say how economic studies are translated into law is political. I agree to some degree, and of course you can find people arguing about pros/cons of a policy.
But that doesn't mean there isn't bias in mainstream economics, economics and politics are deeply intertwined - any application of economic ideas are inherently political. There's no economic policy that benefits everyone equally. But we tend to pick policies that directly benefit the wealthy, or don't really help the poor as directly.
What is your issue with that comment? Because it’s not supported with peer reviewed research? Do you find it not cogent to econometrics?
Objectively, wage earners are worse off than they’ve been in a long time and every government policy exacerbates this (due to campaign contributions aka bribes). And in the process, transferring more wealth than ever to the billionaire class. Do you really believe this is not intentional?
If "income" is too broad, let us look at salary - specifically median weekly earnings:
For 2007
https://www.bls.gov/cps/aa2007/cpsaat39.pdf
>$695
For 2025:
>$1,204
https://www.bls.gov/cps/cpsaat39.htm
It's top comment because people here fundamentally misunderstand what "inflation" means, how it works, why it happens and prefer to just scream about their own personal circumstances rather than looking at data.
I assume you have institutional or professional access to the article, right? Since you're so confident, you must have read the conclusion (not open access) which states:
>Our data thus suggest that inflation improves the distribution of wealth and income in a regime with low inflation but contributes to high inequality in a regime with high inflation. The evidence echoes the conventional view that inflation should be moderate and stable to promote economic growth (Lucas, 1973) and empirical findings of the negative and nonlinear impact of inflation on economic growth, especially beyond a certain threshold level (Bruno and Easterly 1998; Khan and Senhadji 2001).
So it's not "inflation is always bad for inequality" as you suggested. I can also conclude from this that you didn't actually read the article.
Inasmuch as all economic inputs are rents or wages, we've spent the last 45 years hellbent on making sure that rents are the only cost that is allowed to go up.
That is not true. Inflation hurts stocks in short term but in long run earnings adjust higher to account for inflation. Holder of real assets (real estate) do well. Debt holders fundamentally lose out
If you own assets (stocks, real estate, etc), inflation is great. The value of the things you own is increasing. If you don’t own assets and you make a living from wages, you’re essentially losing money because those wages are worth less than before. Just look at who benefits during inflationary periods and who doesn’t. It’s really that simple.
Inflation has a distribution, it doesn't equalize over all prices, the distribution can favor or disfavor certain assets in such a way that something is worth more or less or something else than it used to be, when denominated in that other thing.
For example, a home might be worth more pounds of beef than it used to be, if inflation hits beef and housing unequally (which can happen for a host of reasons.)
The most obvious example is cash itself, if I buy an asset with my money, and you stuff it under your mattress, the value of your asset (cash) drops, while the value of my asset likely remains or goes up.
I mean, at least be clear instead of saying “Inflation is when the price goes up” because that overlooks WHY the price is going up. It’s not “items” “assets” and “prices” increasing in value, it’s the dollar decreasing in value.
No, inflation literally is just when prices increase. It has no inherent statement or even implication of cause. The reasons for inflation are complex and multifaceted.
Natural inflation, yes, but the feds keep printing money to save their asses and devaluing the dollar. Thats what’s causing this inflation. This inflation is far from natural.
I think part of the problem is certainly wages not rising to meet inflation/current economic conditions. There is also a ton of corrupted, foul play going on to benefit the already wealthy.
That is not true. Inflation hurts stocks in short term but in long run earnings adjust higher to account for inflation. Holder of real assets (real estate) do well. Debt holders fundamentally lose out
Wages and purchasing power need to be the main driver of economic health for individuals/households, not the need for 50% asset appreciation in 5 years.
Is all of reddit just pure victim mentality. Nothing is stopping you from opening your own business and turning to the ownership class. Migrants with nothing who sometimes cant even speak english can figure out but lets complain about our choices instead
Well, in theory you could have a system where ownership is heavily distributed and most workers are also investors, whether or not they own part of the company they happen to work at, or other companies.
In fact, if enough people have 401ks or pensions, that is how the system works.
Work a job for a few years and save. Get a loan. I ran a hs business washing windows. You only need a lot of money for white collar venture funding with a good idea with a prototype wiuld get
A person can be an owner and also a worker, that's generally how companies start. And companies can be owned by groups of people, even the workers themselves.
Though, I don't feel that's really what the prior poster is actually envisioning.
Most people dont take risks. Your competition is already smaller than trying to submit to a 9-5. Take a risk, be willing to go fully bankrupt and broke. If it fails, you tried then try the 9-5 and try again lter
It's not Reddit, it's many under 40 who are getting fucked by the current economy. Choose to ignore them and you will LOSE elections. No ivory tower "HURR DURR DATA" matters to them, because they see it with their own eyes and their own communities. The data isn't capturing everything, the system is broken.
Been working 27 years in engineering. I now make roughly 20% less now compared to 20 years ago. I was close before all the tariffs killed a startup job last year.
My son tells me he wants to go into engineering and I really wish he wouldn't.
We wonder why nobody's having kids anymore. Yet somehow the absurdly rich have have, checks notes, increased their wealth by an inverse amount compared to how much everyone else's has decreased. Where I'm from that's called theft, but somehow they get a slap on the wrist while some homeless guy would probably serve more time for stealing $5 compared to someone who stole $5 million.
I'm also pretty sure you'd be able to find it everywhere if you just peeled one layer of the onion back. These people aren't nearly as smart or clever as they think they are. The system is just built to ignore it all.
I remember my first engineering internship at a local manufacturer; they didn't have licenses for SolidWorks, AutoCAD, or any of their software beyond Microsoft stuff. I was installing off burnt discs with keys bypassed.
I only did one stint there, but was feeling very sketchy about the whole thing.
Highly technical jobs may not be as great as in the past but are a hell of a lot better than lower-skilled jobs. There are a. LOT of people really struggling these days.
Ah, I'll try to talk him into law or medical. Two areas that will probably never see the nosedives in the economy that will be hitting again any month now. Given the oil markets are just about to force correct for the year of market manipulation and unwanted war.
They don't even get a slap on the wrist. They get the whole GOPs blind alliance, they get tax cuts fairly regularly targeted directly at them. They are, by Congress' design, a special class deserving of all the resources, assets and monies. Everyone else is perceived as labor. Doctor? Labor. Chef? Labor. Highly skilled engineer? Labor.
The United States isn't in a K shaped economy it's in a politically protected class system.
It's wild to be in a place where I can't afford the quality of life that my parents were able to take for granted, but because I own a 4 year old smartphone that I can't afford to replace, I'm somehow wealthier than Mansa Munsa.
I just want the decades I've put in to my career to have some kind of payoff but that's apparently greedy entitlement now.
George Floyd got rough handled, thrown to the ground, and knelt on for 8min until he suffocated. For what? Use of a fake $20.
Be a corrupt real estate turned TV celeb turned political family who steals a few billions from the people via kickbacks, bribes via crypto, lucrative business deals for government policy favors, insider trading, stock manipulation, pump & dump schemes, money laundered via Saudi/Dubai accounts, etcetcetc? Not only do you not get arrested. You have your own cult of supports who will literally fight online on your behalf and die for you in real life.
The gain in wealth by the ultra wealthy is not the inverse amount of the loss for everyone else. How have you come to this conclusion? What data are you looking at? Literally all groups have gained wealth over time. https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#range:2011.1,2026.1
So the top 10% since 1989 now have roughly 8% more wealth than the rest of the country. That's a share of the pie between 10% vs. 90% of the population. So it's not even inverse it's nearing exponential.
https://www.epi.org/productivity-pay-gap/
While, we have become more productive for a lower share of the profits of our labors.
If that's not related, then the Earth must be flat. Also probably has nothing to do with all the stock buybacks to enrich share holders, or multinational companies raking in hundreds of billions of dollars in year while paying nearly a 0% adjusted tax rate. While we keep moving to tax the workers more by trying to remove income taxes in favor of more use taxes.
I'll tell you how that will work out though. It will make the rich who don't consume nearly as much to justify their wealth exponentially more richer and the rest of us will foot the bill until the system collapses and the rich swoop in and buy it all up. Then the people rise up. Rinse and repeat throughout human history. There are literal studies on the rise and fall of civilizations and the US is already in the final 1/3rd of those stages by all measures.
Talking about increasing or decreasing wealth is different than talking about the share of wealth. You said everyone else was losing wealth because the ultra-wealthy were stealing it. This is not true, and it stems from a misconception of wealth being zero-sum. If in your original comment you specified “share of wealth” then I would’ve agreed with you, because the total share of wealth has to equal 100.
This EPI graph is commonly cited. However, it suffers from a number of methodological problems. This article breaks down those problems in a series of graphs.
First, if you are seeking to compare the growth in productivity of the entire economy with worker compensation, then you should include all workers, not just production and non-supervisory.
Second, workers are paid in more ways than just money wages. Non-monetary forms of compensation have been a growing share of worker compensation. Including these also shrinks the supposed gap between productivity and pay.
Third, much of the gap is a result of using two different price deflators for productivity and pay. If you are seeking to compare the value of worker output with their compensation, then you need to deflate compensation with the business sector price deflator, because this encompasses the value of the things workers actually produce, as opposed to what they consume.
Fourth, productivity growth does not come from labour alone. The EPI graph suggests that any and all productivity growth should go to labour, but if capital is doing some of the work in raising output, then it follows that income should be distributed between these two sources. Moreover, capital depreciates with use, which imposes a cost. That cost needs to be subtracted from gross output before you can talk about what’s ’left over’ to be split between labour and capital.
Figure 5 shows the relationship between the two after all these things have been accounted for.
The last graph, shows the labor share in compensation, whoa, what's that? It looks to currently be about 8% less (sorry my eyes are shit reading on a phone, but that looks pretty accurate) than it was relative to 1970. Ain't that a bitch. Thank you for providing more evidence. You must be a fan of trickle down economics. 😂
Here's the thing all major economists lack:
The stock market being the measure of wealth gain is an awful indicator. CPI and the current inflation numbers are imo being drastically under calculated. The economists writing those papers, wealthy business owners, and politicians literally live in a different world isolated almost surgically from the rest of us. We can build all the wealth in the world, but if 90% of the country is losing wealth over generations and are struggling to literally survive with a roof over their heads, then buckle up, because there will be a correction sooner than later. Hopefully one that makes the new deal almost 100 years ago look like child's play.
Here's an interesting take:
https://youtu.be/xguam0TKMw8?is=P_HR7fbZXBO_xf3t
And we aren't even sure how bad it is because the BLS is underfunded and understaffed.
CPI relies on "secret shoppers" to sample a few stores, and they use those numbers to infer the average. This only works with a sufficient number of samples, but without enough BLS staff and secret shoppers, they have some prices but not enough to accurately infer the true averages.
Im an above average earner and above average investor in that I’ve been drip feeding money into mutual funds since I was 18, and it’s been 30 years now and it’s compounded into a nice nice amount .
I’m debt free. House paid for. Cars paid for.
But my bank account struggles to stay stead , despite a decent salary, while my investment portfolio has been on fire .
I am a K shaped human. I can only imagine what a person without investments and a mortgage feels like.
Garbage data in, Garbage data out. Inflation doesn't include some of the biggest expenses in ones budget, and yet that's were the majority of the Inflation is happening.
Always is. I was 26 when kid fucker was elected and now ill be 35 before he leaves. No one wanted to deal with biden and his "inflation". I bought a house at 6.6% interest 3 years ago and knew what I got into. But I didnt argue with it - there was going to be inflammation after covid (but part of me thinks board members , CEOs, stock holders (boomers) got used to digging deeper and never left) but I did know it was to CORRECT for inflation. It always is on us. The masses. And to see retardo-fuck-kiddos try and lower rates right now (after he made 2 billion) makes me laugh in tears lol
I think Trump added over 3 Trillion to the national debt during this term alone. I think he added over 11 trillion across both terms so far, and there are still 2 years left.
CPI-U includes food and energy. Just CPI, which I believe is what the article is referring to, excludes food and energy because they believe the prices of food and energy are too volatile to be dampened by monetary policy. However, in our current climate, I don’t see food or energy prices going down in either the short term or long term. So yes, the picture seems much bleaker when looking at CPI-U as the real inflation indicator.
Yeah, and then hurriedly tried to hire a bunch of them back. Trump's DOGE spree decimated DES in Arizona, it's super embarrassing. They couldn't even function. Everyone was being directed to super strapped and limited food banks while they're wringing thier hands and high-fiving eachother about all the "waste and fraud" they slashed. People waited nearly a year for application approvals. Katie Hobbs approved some massive fund to hire them back, and things are slowly beginning to move again to get people in need basic healthcare and food assistance again. They have to jump through far more hoops for it, though.
I think there should be a neutral organization that does the government economic data. The people in power can skew the numbers..How do we know the numbers are real or exaggerated? There should be someone neutral doing this data.
Why do we not include grocery prices and gasoline prices??
Yeah, they can't point and say "look how great things are going for the economy! ^for ^one ^specific ^subset ^of ^people!" if they include all relevant costs of living. Gotta omit vital stuff to sell the lie.
Different ways of measuring the data is useful for different things. Including gas prices does not help the Fed decide whether to increase or decrease interest rates. It's not like they can end the war in Iran afterall.
Having said that, there is a measurement of inflation that includes gas and food. It just isn't as useful for the Fed, so people talk about it less
Those who don’t notice inflation as much, and may even benefit as their businesses that they own and investments they have made, also eat. Also need fuel. Also like to insure themselves.
And those are the items that are continually rising.
So they're only not caring about it because what's economically good for one population (successful business owners) is bad for the others? That makes sense. I see people regularly choosing to not care about about things unless they benefit from it personally or it affects them negatively. People just overall don't seem to care about harms that they don't experience...
A friend of mine wen to Walmart this morning to get groceries..He texted me this right here. Word for word. He is a mid level employee for a regional public traded bank that analyzes real estate loans..
"He texted me that real inflation is 25%. I just went to Walmart. Stuff I buy on a regular basis has increased 25% from last year..Just spent $140 on groceries that might last 5 days.."
They swap out food that gets too expensive for cheaper alternatives. It makes sense, as this is what people do too, but it means food inflation naturally reads way lower than what it really is. You stopped buying those chips, that meat, and your favorite cereal because they doubled in price? Oh well, that doubling is irrelevant because it's out of your list and, consequently, out of the food basket too. Then this data more or less gets used to tell you "it's all in your head, not even worth addressing beyond this really. inflation is pretty tame, the data is worth much more than your anecdote (previous staples being measuredly much more expensive)."
Sounds close to right. $140 in groceries lasts my family of 3 about a week. In 2009, $100 fed me for 2 weeks... and I wasn't buying cheap stuff back then like I am now. It doesn't help that other people eat my families' food out from under me...
There's no reason to believe that inflation and wage data is anything but accurate. All of the former BLS commissioners have said the same and the current head is one of the most experienced and qualified members of the agency.
I'm not an economist, just a guy that reads the news, but methodology "adjustments" always resulting in inflation being lower than before feels like a reason to me. If changes in methodology are only done to make recording more accurate, one would think the number would occassionally go up afterwards. Otherwise, it gives the appearance that evaluation of the methodology and proposed changes are only done in order to produce a more favorable result. Not that anyone in government would do something like that...
The underlying trend before trade wars and real wars was disinflation. If you're using different measurements to get to base level trends, you're going to end up showing disinflation.
That makes sense, assuming that a theoretically "correct" change is disinflation. Sorry, the complexity of the topic is a little difficult for me to discuss clearly in writing. I guess my point was less that a change in methodology is incorrect and more that the resulting appearance of changes to it over time can create a reason for a layperson to be skeptical of the number whether that reason is correct or not and I think trust and sentiment do have a material effect on the economy. Cheers!
Which methodology adjustments are you talking about?
Actually, just share the news you’ve been consuming. I’m always down for a good in-depth methodology article by some economics wonk which is what you read, right?
Definitely wasn’t some X account or an anonymous blog by DARKTRADINGPOOLFTX right?
Well, I don't consume the news. I read it and afterwards it's still there for the next person. I mean, if you're actually interested here is a link from a quick google search supporting the point:
In 1996, the bipartisan Boskin Commission published a report stating that the current CPI methodology overstated inflation by about 1% per year. Since then, economists have made 14 adjustments to how the CPI is calculated. A majority of these had the effect of slightly lowering measured inflation, but it’s also true that a few of these adjustments had the opposite effect. Nevertheless, since the old methodology had been shown to overstate inflation, it’s expected that most adjustments would work to bring that number down. https://www.nber.org/system/files/working_papers/w12311/w12311.pdf
Interesting, thanks for the information! My perception, just based on what I've noticed over the years, was that it always seems to result in a lower reported inflation number. Happy to know that's not strictly correct when it means I can dial back the cynicism a bit.
My $80k salary at my F500 company isn't hacking it anymore.
I do $240M in annual revenue per year and yet they cannot / will not give me salary raises. We literally just spent a few hundred million in cap ex on a new project that we have in the pipeline.
I've put my LinkedIn on notice about two weeks ago, putting myself out there for recruiters and I'm already getting interviews left and right for roles that are higher in scope and also higher in pay.
I'm trying to not get left behind in this great inflationary environment. I honestly think we're headed toward economical disaster. Been socketing money away in my HYSA in case of layoffs or major downturns in the economy.
As a non-American - it’s always funny reading these comments of how awful they have it when Americans still have the most disposable income of any group of humans on earth (yes median measurement) (yes, even after taking into account all in kind social transfers), yet reading Reddit you’d assume they are among the poorest people. Americans truly have no concept of how much more frugally a European lives let alone those in less developed countries
For some reason this fact always infuriates people online too 🤷♀️
I am American but I have lots of family in South America and it's true. Most Americans have 0 clue how much worse things can actually get. My mother in law works for the equivalent of $500 a month with 3 kids at home. The norm over there is to live with your kids when you get older and die without a penny to your name. Yet people over here think they have hit rock bottom when they can't afford an apartment and a car on their hourly wage.
This ideology stems from a post ww2 era boom and policy decisions during that time. And the people who actually lived that life passed it to their children who then reaped the benefits while dismantling and siphoning the things that helped the people live it. What didn't change was the story they lived. They romanticized it and promised their children if they just follow the same path they will live a similar life. But by that time period nobody was paying attention to the cracks in the foundation that were forming because of the dismantling, because things were alright.
Fast forward a couple decades from that point and we are at the end game of the dismantling. It will only continue to degrade for the majority of people. The people complaining are people who don't have an understanding of that type of life for the most part. Or what came before and how life in the US was like. So if we continue down the path we are on it's gonna get real ugly real fast for people who don't have proper understanding of poverty. And getting out will take a lot work, willpower and unity for it to happen. Clearly we are not at that stage quite yet, and I fear it is going to be a brutal path to recovery that may never happen in my lifetime.
Yea can easily live a post ww2 lifestyle very cheaply. Small, barebones house, 1 barebones vehicle, very little diet variety, very little consumer ‘stuff’, poor healthcare, etc, etc
It's not and you're missing my point. Most Americans seem to have an attitude of "oh my God we've hit rock bottom" without realizing there's still a looong way to fall.
Funnily enough in this case they actually do, because these problems are not objective, they’re relative. If you compared your situation to medieval times you’d feel richer than a king. There’s really no objective standard of living that’s gonna make someone happy. And if there was we’d be well beyond it already. People are always gonna compare themselves to what others have.
You also have more evenly distributed wealth and real social safety nets like healthcare. Most Americans would happily trade places with someone in Europe. I doubt you’d do the same. American poor is soooo much worse than European poor.
Gee, I sure hate being in the last "developed" country that refuses to offer it's citizens these things. The culture war is incredibly stifling right now, too.
Except that’s not true in my understanding. Can you provide a source? Maybe it’s the disposable income part that’s inconsistent with my understanding, which was based on total income.
Canadian here. If you are looking at just the numbers, you aren't seeing the full story in the US. There are only a few Mega rich people at the top of the food chain and they are so obscenely wealthy, they throw the numbers off. If you removed the top 1% richest, and re-ran the math on this new dataset, you'll be much closer to the real story.
I know what a median measurement is. I did not use the term because I think it's safe to assume that the audience here is American. 3 syllable words confuses you guys, so I try to use words with 2 syllables or less! 🤣
Well, since you wanted to hover at the median I stuck close to it. I didn't touch on the remaining 35% above median. How was I suppose to know you wanted the entire population distribution of above median?
I'm not sure what this is supposed to mean. You said 15% of workers make at or above the median because you were excluding the other 35% of people that make or above median wages? Why?
median fixes skewed population distributions by
finding actual middle values & prevents extreme high or low numbers from pulling this measurement off-balance.
Cool, and I granulated it based on actual population distribution. What is more fascinating is that below median and below poverty is nearly and equal 50/50 split.
I would tend to disagree. I tend to look at more abstract concepts than just being a math nerd. Clearly, this magic median isn't the end all be all, and doesn't really address much other than being a number to point at.
Dude, your entire post shows you have no idea what a median is. The top 1% does not affect the median at all, in any way. And then your replies are you just feeling undeservedly superior.
Seems that people should be voting for candidates that promise and follow through on a balanced budget. Inflation hurts the poor more than anyone else.
Actually wages are outpacing inflation once you adjust for energy, food, medical care services, shelter, and new and used cars. This is truly the most prosperous and resilient economy to have ever existed, and all who claim otherwise are clueless doomers undoubtedly pushing some sort of mentally ill cult-like agenda.
I was waiting for it too, but they’re a red scare podcast follower. Pretty much guaranteed mindrot. I wouldn’t want this guy as my accountant right now, that’s for fucking sure lmao.
bdiddy_ | 13 hours ago
It's funny stat because wages don't just go up every month/week/day. It's not like companies have a real time wage number they adhere to.
Meanwhile oil and gas prices shoot up and prices instantly increase for everyone in no time flat.
Wages will ALWAYS lag inflation in these scenarios and likely will lead to a recession which will continue to stagnate or even reduce wages.
2% is supposed to be the average that the fed is after we have to get it to near 0 in order to fix the past 5 years or excessive inflation.
Quite easy to solve with any normal administration. Higher taxes on the wealthy, fully funded and properly run government programs, no tariffs (consumer tax), and no wars with Iran lol. Edit oh and the obvious.. no trade wars with long time trading partners....
So simple really. Trump just had to do NOTHING and we'd be there. Economy would be booming as these new industries in EV and clean energy tech explode along with AI. Oil prices were headed lower because of oversupply. Still had a deficit, but we'd probably have our first real boomtime economy since the lower taxes of Trumps 1st term. Which means they could continue to kick the can.
It's truly mind boggling. Republicans were handed a gift and they just torched it. It's sad to see the senate and congress so weak willed. They know these things, they are aware of where this was headed.
A team sport with a dear leader is how they choose to act instead and we all suffer.
Life_Without_Lemon | 13 hours ago
His family net worth probably four-fold if not more in just a single year meanwhile fking over the rest of the world.
bunnypaste | 11 hours ago
I heard presidents are supposed to give up businesses that elicit them more than the alotted 400k a year. Maybe they aren't forced to. Didn't Jimmy Carter give up his peanut farm to starkly avoid conflicts of interest? I feel like Trump has dome the reverse, and went brazenly neck-deep into conflicts of interest with no reservation.
How much richer is Trump and his family now, compared to before entering office?
-JackBack- | 11 hours ago
Trump made 1,000 stock trades in June alone and over $1.5 billion in his crypto business last year.
rooftopgoblin | 5 hours ago
trump also personally intervened in the contract process to ensure his sons drone company got a 600 million DoD contract
No-Wasabi-70 | 8 hours ago
Jimmy Carter is such an honorable guy. I got to listen to him speak a few years ago. It’s crazy to think how far we’ve come to be okay with
fascistno1hater | 6 hours ago
Carter was the reason everything started going to shit. People love to blame Regan but ole Jimmy opened the door.
https://truthout.org/articles/neoliberal-policies-associated-with-reaganomics-actually-started-with-carter/
https://www.laprogressive.com/economic-equality/jimmy-carter
https://prospect.org/2025/01/02/2025-01-02-jimmy-carters-economic-legacy/
It's always the same everyone sanewashes these presidents once their out of office. Because most people refuse to read and learn from history. Jimmy Carter was a Neo Liberal and started the destruction of the government harnessing corporations to benefit the American People.
DogsWillSaveUs | 6 hours ago
Sorry..... confirmation bias should not be a manner of choosing for factual reading
fascistno1hater | 5 hours ago
You can downvote all you want. The Facts aren't changing.
DogsWillSaveUs | an hour ago
Which facts? All you provided was opinions
land-league-inspo | 7 hours ago
Doesn't matter, we need to get it all back. Seize everything.
214ObstructedReverie | 3 hours ago
> Didn't Jimmy Carter give up his peanut farm to starkly avoid conflicts of interest?
You People Made Me Give Up My Peanut Farm Before I Got To Be President
International-Mix633 | 12 hours ago
More like ten folded.
plinkoplonka | 11 hours ago
You've missed the point.
Nobody in trump's family or administration are working for the country.
They are making themselves very rich at our expense though.
sfxer001 | 10 hours ago
Republicans torched it because they know if they did nothing, Biden would get credited. It’s easier for them to ruin it and blame it on Biden, to rile up their dumb as fuck base for the midterms.
They are purposely stupid. Intentionally cruel.
1900grs | 12 hours ago
To add, the fact that the federal government hasn't increased minimum wage since 2009 is a problem. There's zero pressure on business to increase the floor. States and municipalities have stepped in, but it's a localized mismash and not a clear signal to industry. It adds to the hoarding by corporations who continue to squeeze small businesses who find more barriers to market entry.
bdiddy_ | 12 hours ago
yup good point. Honestly a number of states have incorporated a higher min wage and this boomtime we were literally headed into those states would see added success from that move so much so that might even influence the federal government to do it. Like boomtime is the time to do this and just feed the growth beast.
So frustrating. Economically it was simple to lead us to another decade of growth.
Instead we TORCHED IT lol. It's genuine insanity.
anewbys83 | 6 hours ago
And Trump told people he was going to do all this on the campaign trail. They voted for him anyway.
HedonisticFrog | 10 hours ago
That in combination with weakening worker and union protections as well. Republicans are trying to get back to the Lochner era were they ruled that even banning child labor was unconstitutional.
OoglieBooglie93 | 9 hours ago
Most people aren't making minimum wage.
The cost of living differs enormously between states, so honestly a semilocalized version is probably better. States vary internally too, but the federal one is always going to be held back by states with low productivity and low costs of living. You would still end up with a system where like 40 or 45 states still need to have their own minimum wage laws, or the poorer states could end up with theirs set too high for their area and have a higher amount of the negative effects. $20/hr might be functional(ish) in San Francisco but would probably cripple rural areas.
A reasonable compromise might be to legally require states to review the minimum wage every 5 years or so and then vote on an increase with a higher threshold for no increase. That kills off the argument for a wage-price spiral by eliminating the automatic feedback loop and still keeps it from lagging indefinitely, while also making it harder to outright freeze.
theriskybusinesscar | 9 hours ago
> The cost of living differs enormously between states, so honestly a semilocalized version is probably better.
This misses the value that comes from the wages being near-equal in varying areas without regard for COL. It induces migration to those lower COL locales. This is an unmitigated societal good.
DoctorBendo | 2 hours ago
Ah, yes, that “unmitigated societal good” of gentrification. You know that is exactly what you’re describing, right? Tell me you are not this dense.
theriskybusinesscar | 58 minutes ago
Yes and it's good.
1900grs | 8 hours ago
> so honestly a semilocalized version is probably better
Hard disagree. There currently too many people at the state level, and even some at th federal level, making moves to bring back child labor. Never mind failed policies like Brownbackistan that greatly put workers at risk. Nah, the federal minimum wage was instituted specifically because states weren't taking care of workers. Funny how quickly people forget the past.
anewbys83 | 6 hours ago
And it was known corporations wouldn't take care of their people, either. If only FDR had made it longer, we may have ended up with his "second bill of rights" implemented.
Oryzae | 10 hours ago
> the fact that the federal government hasn't increased minimum wage since 2009 is a problem
But economists say we don’t have to worry about the federal minimum wage because the market will set the rate, and that the federal minimum wage is rarely the actual minimum wage due to states rights and all. And speaking from someone in WA, jacking up the minimum wage isn’t the complete answer - places have sadly not been able to pay the increased cost and the quality here is just not as good as Portland. Good for workers though
okram2k | 11 hours ago
I think often about how much better the world would be if Trump had just spent the entire last 20 months golfing at Mar-A-Lago and doing literally nothing but sucking up a lil bit of tax payer money with his usual grifts.
StuffExciting3451 | 10 hours ago
Every employee, everywhere, must join or form a strong labor union, and must support solidarity.
Unions can demand that wages be automatically indexed to inflation.
artisanrox | 6 hours ago
Deep Red area here. This is impossible. Most people in Red areas fall at the feet of business owners and consider everyone around them competition. The more boomers at your work place the worse this is, too. We need nationalized health care, universal basic income, and nationalized sick pay.
You cannot depend on most workers to do this because they're flat out honestly too selfish, self-centered and toddler-brained to comprehend labor movements.
StuffExciting3451 | 6 hours ago
Most of the boomers will soon be retired — voluntarily or involuntarily— or dead, relatively soon. Many have already died. Many will die, sooner, due to unaffordable healthcare.
As for the red-hat MAGAts, many are beginning to feel the consequences of their loyalty to their employers, the GOP and their dear leader.
growaway9172 | 3 hours ago
Social safety nets like welfare, SNAP, and housing assistance have supplanted unions.
StuffExciting3451 | 3 hours ago
Not at all — but they have dissuaded many desperate people from taking militant actions to demand justice. Those governmental “benefits” are no substitute for well-paying jobs or Universal Basic Income.
growaway9172 | 2 hours ago
Thats what I mean, they have sucked all of the oxygen out of the room that could have gave birth to unions. Just barely enough bread and circus to prevent the people from actually doing something about their crappy jobs (unionizing).
GrumblyData3684 | 12 hours ago
I use the mental image of a 1970’s style Nuclear Plant control room - they just ran in and started cranking knobs and pushing buttons, not keeping notes or records. What are the chances they can figure out how to get it back to anywhere near stable?
No-Profession5134 | 10 hours ago
I am worried Trump's failed ideas are now baked into any Future Republican leaders. We will be dealing with this failure until the ideas are recognized as not worth doing ever again by all sides.
ShitDollop | 7 hours ago
> I am worried Trump's failed ideas are now baked into any Future leaders.
Fixed it for you. Status quo doesn’t typically give up the new status quo. Most of Trumps bullshit will be the floor for whoever is next.
anewbys83 | 6 hours ago
And they will never recognize them as such. I've been waiting for them to finally admit Reagan's ideas were wrong. That will probably happen before they admit so with Trump’s.
onesun43 | 9 hours ago
So you’re saying we’d be better off with Biden sleeping for four years than Trump.
artisanrox | 6 hours ago
yes because Biden actually slept at night, not in the middle of Oval Office meetings
viperabyss | 5 hours ago
I mean, real wage has steadily increased since 2022...
lyricist | 11 hours ago
What’s a boomtime economy
The10KThings | 14 hours ago
Let’s call inflation what it really is: a transfer of wealth from the working class to the ownership class. It’s by design. We are fighting a class war. The sooner people wake up and realize this the sooner we can start doing something about it.
Lady_Rubberbones | 14 hours ago
Bingo. But if history is anything of an indicator, nothing will happen until a whole bunch of people lose their lives first.
FreeMarketFlora | 13 hours ago
> whole bunch of people lose their lives first
If you're implying the French revolution, it's quite unlikely
If you meant something like COVID, I do not know what changed
AdPuzzleheaded1495 | 13 hours ago
Im thinking more like Spanish flu level death, 10's of millions
Spaduf | 13 hours ago
What an insane couple of examples to jump to
23rdCenturySouth | 10 hours ago
> If you're implying the French revolution, it's quite unlikely
Based on the data available from US history, I'd say it is much more unlikely that we would even get to the point of inequality we have already reached. We've had a revolution, a civil war, and a complete reconsideration of economic relationships at the prior three local maximums - each of which was significantly less extreme than our current one.
How do you imagine this going, exactly?
FreeMarketFlora | an hour ago
I don't imagine this going any specific way. My point was a simple question to the person who suggested things aren't going to change unless bigly people end up dead
23rdCenturySouth | an hour ago
Sounds like you haven't put much thought into it
FreeMarketFlora | an hour ago
I am guilty of that, I'll admit
anewbys83 | 6 hours ago
I was thinking Russian Revolution.
I_Love_To_Poop420 | 11 hours ago
There is one group fully aware and as far as I know the only group actively doing anything about it. The DSA and they are very quickly gaining support much to the dismay of establishment democrats, the entirety of the Guardians Of Pedophiles and the mainstream propaganda machine disguised as news media.
BenEWhittle | 12 hours ago
Dude, this is the Economics subreddit, you’re supposed to say something like “well that’s just how the market works” and then not question it further.
artnoi43 | 10 hours ago
Yes I agree. But college-trained traditional economists with very good credentials will come in and say “it is normal” and make us sound like angry leftists who don’t understand economics. I hate this so much.
One thing I hate is when my country’s economists keep cautioning against wage raises, saying it’ll trigger landslide problems afterwards etc etc, with a model to confirm that. While in reality we DID raise wages multiple times and none of that happened in the long run. Sure in the months that followed things will change and might be more expensive, but let it run and eventually everything got fine if not better.
If wage raises are so risky why our country (and most countries) never had an economic episode or crises directly caused by the raises? Like I never heard of “Rich Waiter Crisis” or anything like that. I tried searching “was there an economic crisis caused by wage raises” and nothing turned up.
BlueBerry_Cream_Pie | 6 hours ago
We got into the inflationary environment we're in today due to money circulation but isn't that we raised wages across states in the past few years not attributed to inflation as well?
It feels like when I go to the grocery store, I have to do a double, triple check on prices with a pikachu shocked reaction causes prices seem to be increasing about every other week in certain products. It's not sustainable. It's untenable to the everyday average American with the way things are headed/going.
I think we're on the verge of an economic crises. It will occur before Trumps presidency is over or after the democrats take office, its most likely to occur after since Trump wants to inject even more money into the economy his is $5k check federal program.
If you aren't saving now for when the financial crises occurs, you better starts TODAY.
Olangotang | 6 hours ago
Raising wages causes inflation, but much lower as it is distributed across all customers. So you may raise the minimum wage by 5 dollars over 10 years, but that ends up being less than a dollar in actual cost per fast food customer. The economy also catches up eventually.
BlueBerry_Cream_Pie | 6 hours ago
I get it. I think its boiling down to a few variables, such as greed, current political climate, and maybe even climate change baked into the overall economical landscape.
defaultedebt | 13 hours ago
This nonsense does not belong here, no economist holds such beliefs. It's so blatantly incorrect that it's not even worth a serious response.
catcatcattreadmill | 13 hours ago
I think the intuition is roughly the correct direction, but poorly framed. Inflation hurts low income folks a lot more than rich folks.
If Elon Musk wants to eat steak it literally doesn't matter to his bank account whether that steak is $10 or $1,000,000. So the rich aren't really 'squeezed'.
Manufacturers of items are still mostly seeing profit margins expand. In a hypothetical where margins are constant, if you had an item selling for $100 in 2019, which has now doubled in price to $200, you have seen your per unit profit double.
All together this does transfer wealth to capital owners from the consumers.
AnUnmetPlayer | 11 hours ago
> I think the intuition is roughly the correct direction, but poorly framed. Inflation hurts low income folks a lot more than rich folks.
Does it? The price of labour also rises due to inflation, meanwhile debt is nominal. If there are still real increases to wages then inflation will cause a wealth transfer from net creditors to net debtors as real debt burdens fall. That will benefit low income people more than rich people.
There are tons of dynamic effects but over a long time period there is ultimately an effect where inflation benefits net debtors. The idea of inflating the debt away applies to households too.
ChrisFromLongIsland | 9 hours ago
If anything inflation helps debtors and hurts savers generally.
AnUnmetPlayer | 8 hours ago
That's exactly what I was saying. And are poor people more likely to be debtors or savers? Are rich people debtors or savers?
Inflation doesn't actually hurt low income people so long as their wages are rising with inflation. It helps them by shrinking debt burdens.
AssociationWeary7735 | 8 hours ago
Rich people have much more debt than poor people https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Debt;demographic:nwcat;population:1,2,3,4,5;units:median;range:1989,2022 They benefit more in absolute terms and are less burdened by financing costs (both able to negotiate better rates and rates are smaller proportion of net worth).
AnUnmetPlayer | 7 hours ago
Now compare against financial assets to work out net debtor vs net creditor positions.
AssociationWeary7735 | 7 hours ago
Can you explain why does that matter? The rich are able to and do obtain more debt and buy more assets with it while the poor cannot. The more assets you own the more you benefit from inflation as asset values inflate. The more debt you hold the more you benefit from inflation as the value of the debt decreases. The poor may be more net debtor but they are still getting lapped in absolute terms by inflation driven wealth transfer and the inequality gap is driven higher.
AnUnmetPlayer | 2 hours ago
>Can you explain why does that matter?
Because the benefit of devaluing their debt is more than offset by devaluing their financial assets. Inflation eats away at all nominal values. The net creditors have the net impact of their financial savings getting devalued while the net debtors have the net impact of their debt being devalued.
>The rich are able to and do obtain more debt and buy more assets with it while the poor cannot.
This is always true regardless of any inflation driven effects.
>The more assets you own the more you benefit from inflation as asset values inflate.
Unless they're inflating at a greater rate than overall inflation then it's not a benefit, just keeping up.
>The poor may be more net debtor but they are still getting lapped in absolute terms by inflation driven wealth transfer and the inequality gap is driven higher.
The net debtor is experiencing a wealth effect that benefits them as they get less poor when their debt loses value in real terms.
I'll make an extreme example. If you're a lower income homeowner that earns $50k per year with a $300k mortgage and everything inflates (including wages) 100x in a single year, you now have a $5m per year income with an unchanged mortgage still at $300k (ignoring a year's worth of mortgage payments). Are you financially better off or worse off than last year? And is the bank or investor that ultimately owns that mortgage as a financial asset better off or worse off?
I think you're attributing other economic issues that are driving greater inequality to inflation.
anewbys83 | 5 hours ago
But we all know from experience wages don't rise quickly enough to do that.
catcatcattreadmill | 10 hours ago
That's assuming that capital owners are willing to take a loss on their profit margins. All else equal, they benefit more, as I tried to demonstrate in previous comment.
AnUnmetPlayer | 10 hours ago
It has nothing to do with profit margins, which are nominal. Hold margins constant and inflation still eats away at real debt burdens. Net debtors win while net creditors lose.
It's the opposite of deflationary dynamics causing hoarding behaviour. If savings increase in real value year after year, then that's good for those with savings. Who has the most savings? Similarly if you're a net creditor in a deflationary environment then your financial assets just get more and more valuable every year. That's obviously good for you.
thomasscat | 12 hours ago
That can all be true but anyone who says “by design” in an economy with trillions of variable and billions of actors is not a serious person IMO
LNCrizzo | 12 hours ago
Our economic system may be an emergent system, but it's still constantly being nudged to favor the rich and powerful over the average person. It's not like there's a shadowy cabal who planned it all out, but it is a series of choices made over decades and centuries that led us to where we are.
1900grs | 12 hours ago
There are very clearly outsized financial players who greatly influence the economy over others. Ignoring that with a hand wave is ridiculous.
Is there an annual meeting of evil elites plotting a strategy like the Illuminati? No. But Davos exists. And it would be silly to think the economically and politically powerful are not in contact through numerous means forming a loose framework.
YamborginiLow | 12 hours ago
An economy with trillions of variables and billions, but the asset owners are NEVER on the losing end, and politicians never implement policies that help the majority of citizens but will hurt the asset owners - but it's not by design.
Puzzleheaded-Leg1877 | 12 hours ago
and somehow you are not the serious person IHS (in his/her opinion)
Cheap-Explanation293 | 11 hours ago
May I introduce you to the IMF and World Bank. Hell even the Federal Reserve.
Oryzae | 11 hours ago
Genuinely curious- don’t economists have a bias toward people who already have capital? I’m thinking rent control and minimum wage supposedly not doing anything, would rather not have corporate taxes than pay the worker more. Basically they’ll help with the things at the top, and then just say “well the laws and regulations need to distribute it” rather than just giving it directly to poor people. IME in the chase of answering efficiency questions, we keep handing out money to the rich instead of who is the most deserving of it.
defaultedebt | 10 hours ago
I mean, not generally. There's hundreds of studies on inequality from reputable economists who critique capital accumulation. For example in the NYTimes, specifically on tech:
https://archive.is/20221110112634/https://www.nytimes.com/2022/01/11/technology/income-inequality-technology.html#selection-655.0-655.304
>Globalization and the weakening of unions have played roles. “But the most important factor is automation,” Mr. Acemoglu said. And automation-fueled inequality is “not an act of God or nature,” he added. “It’s the result of choices corporations and we as a society have made about how to use technology.”
>Paul Romer, who won a Nobel in economic science for his work on technological innovation and economic growth, has expressed alarm at the runaway market power and influence of the big tech companies.
>Anton Korinek, an economist at the University of Virginia, and Joseph Stiglitz, a Nobel economist at Columbia University, have written a paper, “Steering Technological Progress,” which recommends steps from nudges for entrepreneurs to tax changes to pursue “labor-friendly innovations.”
Their arguments are supported by a lot of data and research too, it's not just opinion.
>I’m thinking rent control and minimum wage supposedly not doing anything, would rather not have corporate taxes than pay the worker more.
On this particular point, studies on rent control suggest more negative than positive impact for those who the policy aims to benefit most (e.g. low income, minority groups etc) and reduces the flexibility of choice in housing and elasticity of housing supply. Oversimplifying, but effectively leads to a more static market, which doesn't really address the problems of high rents.
Minimum wage is more mixed, some argue that increases to min wage is broadly positive, other argue broadly negative and others neutral. Not an overwhelming consensus on this one. I'm also not super familiar with min wage studies, so take that with a pinch of salt.
Corporate (and I assume) wealth taxes is again a bit of a mixed bag, but generally high corporate taxes are viewed as somewhat inefficient and similar for wealth taxes. Not that they can't work, but that some studies have found a net-negative impact and others finding a marginal positive impact on government revenue.
But yes, on efficiency it is possible that something "moral" goes amiss, but that doesn't have to be the case. Economists can, and have, made arguments that both claim to increase efficiency while also making for a fairer society.
Oryzae | 9 hours ago
> There's hundreds of studies on inequality from reputable economists who critique capital accumulation…. Economists can, and have, made arguments that both claim to increase efficiency while also making for a fairer society.
Good to know! It doesn’t feel like that’s the mainstream take, or policies backed by these ideas are too popular. Thank you so much for this detailed breakdown. It is heartening that there are economists like Acemoglu (I’ve heard his name a lot, I’ll dig into a bit this weekend).
Dangerous-Sport-2347 | 2 hours ago
Economists don't inherently have certain politicial leanings. Like anyone, they might have different political goals in mind.
But if you want economic policies that help accomplish your goal, economist are the right people to look for. Find the ones you can trust, that are rigorous, that have reached a consensus.
Even left wing economists will agree for example that rent control is often detrimental. Read through their arguments, they are serious about helping the poor and they are writing these things for a reason.
ChrisFromLongIsland | 9 hours ago
You are making political decisions not economic ones. Economics are agnostic. You can say your economic policy and an economist will tell you what they think the result is. Not all economists agree. Though generally there are accepted principles. The left and right politicians pick economists who agree with them though usually they pick ones that are not mainstream.
Oryzae | 8 hours ago
> You are making political decisions not economic ones. Economics are agnostic.
You mean to say how economic studies are translated into law is political. I agree to some degree, and of course you can find people arguing about pros/cons of a policy.
But that doesn't mean there isn't bias in mainstream economics, economics and politics are deeply intertwined - any application of economic ideas are inherently political. There's no economic policy that benefits everyone equally. But we tend to pick policies that directly benefit the wealthy, or don't really help the poor as directly.
moshennik | 13 hours ago
You can reliably predict the dumbest take will always get the most upvotes in this sub.
MrTsBlackVan | 12 hours ago
What is your issue with that comment? Because it’s not supported with peer reviewed research? Do you find it not cogent to econometrics?
Objectively, wage earners are worse off than they’ve been in a long time and every government policy exacerbates this (due to campaign contributions aka bribes). And in the process, transferring more wealth than ever to the billionaire class. Do you really believe this is not intentional?
There’s a reason it’s the top comment
bobandgeorge | 12 hours ago
Because it's literally not what inflation is.
defaultedebt | 12 hours ago
> What is your issue with that comment? Because it’s not supported with peer reviewed research? Do you find it not cogent to econometrics?
All three: Yes.
>Objectively, wage earners are worse off than they’ve been in a long time
Objectively! Well I suppose you have data and "peer reviewed research" supporting it, econometric proofs includes, right?
While we wait for this, here's some food for thought:
https://apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=survey#eyJhcHBpZCI6MTksInN0ZXBzIjpbMSwyLDMsM10sImRhdGEiOltbImNhdGVnb3JpZXMiLCJTdXJ2ZXkiXSxbIk5JUEFfVGFibGVfTGlzdCIsIjU4Il0sWyJGaXJzdF9ZZWFyIiwiMjAwNyJdLFsiTGFzdF9ZZWFyIiwiMjAyNiJdLFsiU2NhbGUiLCItOSJdLFsiU2VyaWVzIiwiQSJdXX0=
Disposable personal income per capita:
>2007 - 39,954
>2025 - 52,689
Quite literally opposite to your claim.
If "income" is too broad, let us look at salary - specifically median weekly earnings:
For 2007
https://www.bls.gov/cps/aa2007/cpsaat39.pdf
>$695
For 2025:
>$1,204
https://www.bls.gov/cps/cpsaat39.htm
It's top comment because people here fundamentally misunderstand what "inflation" means, how it works, why it happens and prefer to just scream about their own personal circumstances rather than looking at data.
CoolLordL21 | 11 hours ago
Edit: Deleted original comment. Above comment should say "real" income and such to match their source.
Spoolofwhool | 11 hours ago
The numbers given have already been adjusted for inflation
CoolLordL21 | 10 hours ago
Ah, thanks. They really should add "real" into their comment, as what they wrote is contradicted by their source.
The10KThings | 12 hours ago
Here you go. I’m pretty sure the people that wrote this are economists.
https://www.sciencedirect.com/science/article/abs/pii/S0313592624000973
defaultedebt | 12 hours ago
I assume you have institutional or professional access to the article, right? Since you're so confident, you must have read the conclusion (not open access) which states:
>Our data thus suggest that inflation improves the distribution of wealth and income in a regime with low inflation but contributes to high inequality in a regime with high inflation. The evidence echoes the conventional view that inflation should be moderate and stable to promote economic growth (Lucas, 1973) and empirical findings of the negative and nonlinear impact of inflation on economic growth, especially beyond a certain threshold level (Bruno and Easterly 1998; Khan and Senhadji 2001).
So it's not "inflation is always bad for inequality" as you suggested. I can also conclude from this that you didn't actually read the article.
Do better.
23rdCenturySouth | 12 hours ago
Inasmuch as all economic inputs are rents or wages, we've spent the last 45 years hellbent on making sure that rents are the only cost that is allowed to go up.
handsoapdispenser | 13 hours ago
The only people helped by inflation are debt holders. It doesn't transfer wealth up.
DigiVeihl | 13 hours ago
Who do you think owns most of the debt?
CoolLordL21 | 12 hours ago
Had to look it up, but the Federal Reserve is the answer, owning about $4.5 trillion in debt.
TreeInternational771 | 13 hours ago
That is not true. Inflation hurts stocks in short term but in long run earnings adjust higher to account for inflation. Holder of real assets (real estate) do well. Debt holders fundamentally lose out
Fantastic-Kale9603 | 13 hours ago
Inflation affects asset prices too
The10KThings | 13 hours ago
If you own assets (stocks, real estate, etc), inflation is great. The value of the things you own is increasing. If you don’t own assets and you make a living from wages, you’re essentially losing money because those wages are worth less than before. Just look at who benefits during inflationary periods and who doesn’t. It’s really that simple.
handsoapdispenser | 13 hours ago
> The value of the things you own is increasing.
The value does not increase. Only the price. That's the whole point of inflation.
The-Magic-Sword | 11 hours ago
Inflation has a distribution, it doesn't equalize over all prices, the distribution can favor or disfavor certain assets in such a way that something is worth more or less or something else than it used to be, when denominated in that other thing.
For example, a home might be worth more pounds of beef than it used to be, if inflation hits beef and housing unequally (which can happen for a host of reasons.)
The most obvious example is cash itself, if I buy an asset with my money, and you stuff it under your mattress, the value of your asset (cash) drops, while the value of my asset likely remains or goes up.
BasedKaleb | 13 hours ago
I mean, at least be clear instead of saying “Inflation is when the price goes up” because that overlooks WHY the price is going up. It’s not “items” “assets” and “prices” increasing in value, it’s the dollar decreasing in value.
WheresTheSauce | 13 hours ago
No, inflation literally is just when prices increase. It has no inherent statement or even implication of cause. The reasons for inflation are complex and multifaceted.
BasedKaleb | 12 hours ago
Natural inflation, yes, but the feds keep printing money to save their asses and devaluing the dollar. Thats what’s causing this inflation. This inflation is far from natural.
bunnypaste | 11 hours ago
I think part of the problem is certainly wages not rising to meet inflation/current economic conditions. There is also a ton of corrupted, foul play going on to benefit the already wealthy.
handsoapdispenser | 13 hours ago
Which hurts people who have a lot of dollars.
BasedKaleb | 12 hours ago
They don’t keep their money in dollars, they buy assets that raises in price as the dollar drops
dethswatch | 11 hours ago
> are debt holders
Really? So you owe me 100 and inflation is near 10% vs the 3% when you made that loan and I'm having a better time of it?
Mate...
dust4ngel | 10 hours ago
if someone owes you money, the debt is theirs, not yours
dethswatch | 8 hours ago
they are the debtors, you hold the debt
TreeInternational771 | 13 hours ago
That is not true. Inflation hurts stocks in short term but in long run earnings adjust higher to account for inflation. Holder of real assets (real estate) do well. Debt holders fundamentally lose out
Parisisthemost | 12 hours ago
Wages and purchasing power need to be the main driver of economic health for individuals/households, not the need for 50% asset appreciation in 5 years.
spendology | 11 hours ago
We fought a class war and we LOST.
a_library_socialist | 12 hours ago
no war but class war
No-Wasabi-70 | 8 hours ago
What can we do besides unionize? I’m a railroader so I’m a little protected. I can’t afford to miss work though
Negative_Aerie2825 | 11 hours ago
Is all of reddit just pure victim mentality. Nothing is stopping you from opening your own business and turning to the ownership class. Migrants with nothing who sometimes cant even speak english can figure out but lets complain about our choices instead
The10KThings | 11 hours ago
You do realize that not everyone can be an owner in a capitalist system, right? Like it’s actually impossible. The system would cease to function.
The-Magic-Sword | 11 hours ago
Well, in theory you could have a system where ownership is heavily distributed and most workers are also investors, whether or not they own part of the company they happen to work at, or other companies.
In fact, if enough people have 401ks or pensions, that is how the system works.
Negative_Aerie2825 | 10 hours ago
Lot of words for excuses
SpecialistBank1394 | 11 hours ago
Let me guess, you didn't even try.
The10KThings | 11 hours ago
The response to slavery is to abolish slavery, not become a slave owner.
Negative_Aerie2825 | 10 hours ago
Ofc he didnt, hell blame everyone but himself
Reagalan | 10 hours ago
> Nothing is stopping you from opening your own business and turning to the ownership class.
Need money to make money.
Negative_Aerie2825 | 10 hours ago
Work a job for a few years and save. Get a loan. I ran a hs business washing windows. You only need a lot of money for white collar venture funding with a good idea with a prototype wiuld get
dust4ngel | 10 hours ago
if everyone is an owner, who does the work? whose labor do you profit off of?
reasonably_plausible | 9 hours ago
A person can be an owner and also a worker, that's generally how companies start. And companies can be owned by groups of people, even the workers themselves.
Though, I don't feel that's really what the prior poster is actually envisioning.
Negative_Aerie2825 | 10 hours ago
Most people dont take risks. Your competition is already smaller than trying to submit to a 9-5. Take a risk, be willing to go fully bankrupt and broke. If it fails, you tried then try the 9-5 and try again lter
Olangotang | 6 hours ago
It's not Reddit, it's many under 40 who are getting fucked by the current economy. Choose to ignore them and you will LOSE elections. No ivory tower "HURR DURR DATA" matters to them, because they see it with their own eyes and their own communities. The data isn't capturing everything, the system is broken.
deadra_axilea | 14 hours ago
Been working 27 years in engineering. I now make roughly 20% less now compared to 20 years ago. I was close before all the tariffs killed a startup job last year.
My son tells me he wants to go into engineering and I really wish he wouldn't.
We wonder why nobody's having kids anymore. Yet somehow the absurdly rich have have, checks notes, increased their wealth by an inverse amount compared to how much everyone else's has decreased. Where I'm from that's called theft, but somehow they get a slap on the wrist while some homeless guy would probably serve more time for stealing $5 compared to someone who stole $5 million.
bunnypaste | 11 hours ago
I sure wish they went after white collar crime as voraciously as they do street crimes, but I know why that doesn't happen.
deadra_axilea | 11 hours ago
I'm also pretty sure you'd be able to find it everywhere if you just peeled one layer of the onion back. These people aren't nearly as smart or clever as they think they are. The system is just built to ignore it all.
thekbob | 9 hours ago
I remember my first engineering internship at a local manufacturer; they didn't have licenses for SolidWorks, AutoCAD, or any of their software beyond Microsoft stuff. I was installing off burnt discs with keys bypassed.
I only did one stint there, but was feeling very sketchy about the whole thing.
deadra_axilea | 6 hours ago
Same, software licensing in the 90's/early 00's was just a suggestion apparently. 🤣
snowtax | 10 hours ago
Highly technical jobs may not be as great as in the past but are a hell of a lot better than lower-skilled jobs. There are a. LOT of people really struggling these days.
deadra_axilea | 6 hours ago
Ah, I'll try to talk him into law or medical. Two areas that will probably never see the nosedives in the economy that will be hitting again any month now. Given the oil markets are just about to force correct for the year of market manipulation and unwanted war.
I weep for our future generations.
HVACdadddy | an hour ago
high level tradesman will never be out of work.
mosthandsomechef | 13 hours ago
They don't even get a slap on the wrist. They get the whole GOPs blind alliance, they get tax cuts fairly regularly targeted directly at them. They are, by Congress' design, a special class deserving of all the resources, assets and monies. Everyone else is perceived as labor. Doctor? Labor. Chef? Labor. Highly skilled engineer? Labor.
The United States isn't in a K shaped economy it's in a politically protected class system.
millen-malaise | 7 hours ago
It's wild to be in a place where I can't afford the quality of life that my parents were able to take for granted, but because I own a 4 year old smartphone that I can't afford to replace, I'm somehow wealthier than Mansa Munsa.
I just want the decades I've put in to my career to have some kind of payoff but that's apparently greedy entitlement now.
zxc123zxc123 | 5 hours ago
George Floyd got rough handled, thrown to the ground, and knelt on for 8min until he suffocated. For what? Use of a fake $20.
Be a corrupt real estate turned TV celeb turned political family who steals a few billions from the people via kickbacks, bribes via crypto, lucrative business deals for government policy favors, insider trading, stock manipulation, pump & dump schemes, money laundered via Saudi/Dubai accounts, etcetcetc? Not only do you not get arrested. You have your own cult of supports who will literally fight online on your behalf and die for you in real life.
David_ungerer | 13 hours ago
I tell people, that know better, if Capitalism does not work for every Citizen, then F@#k it . . . And the supporters and defenders !
Johnfromsales | 12 hours ago
The gain in wealth by the ultra wealthy is not the inverse amount of the loss for everyone else. How have you come to this conclusion? What data are you looking at? Literally all groups have gained wealth over time. https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#range:2011.1,2026.1
deadra_axilea | 11 hours ago
Sure inflation has made us all marginally richer, but with the average costs of gestures at everything that increase in wealth doesn't mean shit.
https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#range:1989.3,2026.1;quarter:146;series:Net%20worth;demographic:networth;population:1,3,5,7,9;units:shares
So the top 10% since 1989 now have roughly 8% more wealth than the rest of the country. That's a share of the pie between 10% vs. 90% of the population. So it's not even inverse it's nearing exponential.
https://www.epi.org/productivity-pay-gap/
While, we have become more productive for a lower share of the profits of our labors.
If that's not related, then the Earth must be flat. Also probably has nothing to do with all the stock buybacks to enrich share holders, or multinational companies raking in hundreds of billions of dollars in year while paying nearly a 0% adjusted tax rate. While we keep moving to tax the workers more by trying to remove income taxes in favor of more use taxes.
I'll tell you how that will work out though. It will make the rich who don't consume nearly as much to justify their wealth exponentially more richer and the rest of us will foot the bill until the system collapses and the rich swoop in and buy it all up. Then the people rise up. Rinse and repeat throughout human history. There are literal studies on the rise and fall of civilizations and the US is already in the final 1/3rd of those stages by all measures.
Johnfromsales | 10 hours ago
Talking about increasing or decreasing wealth is different than talking about the share of wealth. You said everyone else was losing wealth because the ultra-wealthy were stealing it. This is not true, and it stems from a misconception of wealth being zero-sum. If in your original comment you specified “share of wealth” then I would’ve agreed with you, because the total share of wealth has to equal 100.
This EPI graph is commonly cited. However, it suffers from a number of methodological problems. This article breaks down those problems in a series of graphs.
First, if you are seeking to compare the growth in productivity of the entire economy with worker compensation, then you should include all workers, not just production and non-supervisory.
Second, workers are paid in more ways than just money wages. Non-monetary forms of compensation have been a growing share of worker compensation. Including these also shrinks the supposed gap between productivity and pay.
Third, much of the gap is a result of using two different price deflators for productivity and pay. If you are seeking to compare the value of worker output with their compensation, then you need to deflate compensation with the business sector price deflator, because this encompasses the value of the things workers actually produce, as opposed to what they consume.
Fourth, productivity growth does not come from labour alone. The EPI graph suggests that any and all productivity growth should go to labour, but if capital is doing some of the work in raising output, then it follows that income should be distributed between these two sources. Moreover, capital depreciates with use, which imposes a cost. That cost needs to be subtracted from gross output before you can talk about what’s ’left over’ to be split between labour and capital.
Figure 5 shows the relationship between the two after all these things have been accounted for.
deadra_axilea | 5 hours ago
The last graph, shows the labor share in compensation, whoa, what's that? It looks to currently be about 8% less (sorry my eyes are shit reading on a phone, but that looks pretty accurate) than it was relative to 1970. Ain't that a bitch. Thank you for providing more evidence. You must be a fan of trickle down economics. 😂
Here's the thing all major economists lack:
The stock market being the measure of wealth gain is an awful indicator. CPI and the current inflation numbers are imo being drastically under calculated. The economists writing those papers, wealthy business owners, and politicians literally live in a different world isolated almost surgically from the rest of us. We can build all the wealth in the world, but if 90% of the country is losing wealth over generations and are struggling to literally survive with a roof over their heads, then buckle up, because there will be a correction sooner than later. Hopefully one that makes the new deal almost 100 years ago look like child's play.
Here's an interesting take: https://youtu.be/xguam0TKMw8?is=P_HR7fbZXBO_xf3t
Geigengiger | 10 hours ago
Maybe bombing another independent nation somewhere on earth in the name of Zionism will solve things this time.
We were so sure it would work last time...
vertigo3pc | 10 hours ago
And we aren't even sure how bad it is because the BLS is underfunded and understaffed.
CPI relies on "secret shoppers" to sample a few stores, and they use those numbers to infer the average. This only works with a sufficient number of samples, but without enough BLS staff and secret shoppers, they have some prices but not enough to accurately infer the true averages.
https://www.nytimes.com/2025/06/04/business/bls-price-data-collection.html
https://www.nytimes.com/2025/07/30/business/bls-data-collection-cuts-cpi.html
https://www.reuters.com/business/inflation-data-draw-scrutiny-after-bls-firing-21-trillion-tips-market-risk-2025-08-11/
https://finance.yahoo.com/economy/articles/trump-fired-bls-chief-over-110000985.html
https://www.whitehouse.gov/releases/2025/08/bls-has-lengthy-history-of-inaccuracies-incompetence/
IKillZombies4Cash | 5 hours ago
Im an above average earner and above average investor in that I’ve been drip feeding money into mutual funds since I was 18, and it’s been 30 years now and it’s compounded into a nice nice amount .
I’m debt free. House paid for. Cars paid for.
But my bank account struggles to stay stead , despite a decent salary, while my investment portfolio has been on fire .
I am a K shaped human. I can only imagine what a person without investments and a mortgage feels like.
Less_Volume8174 | 14 hours ago
Garbage data in, Garbage data out. Inflation doesn't include some of the biggest expenses in ones budget, and yet that's were the majority of the Inflation is happening.
picardo85 | 14 hours ago
In other words, is much worse than its shown to be
Available-Battle-753 | 14 hours ago
Always is. I was 26 when kid fucker was elected and now ill be 35 before he leaves. No one wanted to deal with biden and his "inflation". I bought a house at 6.6% interest 3 years ago and knew what I got into. But I didnt argue with it - there was going to be inflammation after covid (but part of me thinks board members , CEOs, stock holders (boomers) got used to digging deeper and never left) but I did know it was to CORRECT for inflation. It always is on us. The masses. And to see retardo-fuck-kiddos try and lower rates right now (after he made 2 billion) makes me laugh in tears lol
bunnypaste | 11 hours ago
I think Trump added over 3 Trillion to the national debt during this term alone. I think he added over 11 trillion across both terms so far, and there are still 2 years left.
Key-Organization3158 | 14 hours ago
It includes pretty much every category of expenses.
Housing, Transportation, Food, Energy, and Medical Care.
https://www.bls.gov/news.release/cpi.t01.htm
ganjamonsta | 13 hours ago
CPI-U includes food and energy. Just CPI, which I believe is what the article is referring to, excludes food and energy because they believe the prices of food and energy are too volatile to be dampened by monetary policy. However, in our current climate, I don’t see food or energy prices going down in either the short term or long term. So yes, the picture seems much bleaker when looking at CPI-U as the real inflation indicator.
Less_Volume8174 | 14 hours ago
Remember when Trump fired everyone? Pepperridge farm Remembers!
bunnypaste | 11 hours ago
Yeah, and then hurriedly tried to hire a bunch of them back. Trump's DOGE spree decimated DES in Arizona, it's super embarrassing. They couldn't even function. Everyone was being directed to super strapped and limited food banks while they're wringing thier hands and high-fiving eachother about all the "waste and fraud" they slashed. People waited nearly a year for application approvals. Katie Hobbs approved some massive fund to hire them back, and things are slowly beginning to move again to get people in need basic healthcare and food assistance again. They have to jump through far more hoops for it, though.
WheresTheSauce | 14 hours ago
Do you have an actual argument?
Less_Volume8174 | 14 hours ago
https://www.npr.org/2025/03/11/nx-s1-5323155/economic-data-reliability-trump-howard-lutnick
defaultedebt | 13 hours ago
You could have just said "no" in response to their question, would save us time.
handsoapdispenser | 13 hours ago
He fired one person and was forced to replace them with a competent expert.
ForBirmingham205 | 14 hours ago
I think there should be a neutral organization that does the government economic data. The people in power can skew the numbers..How do we know the numbers are real or exaggerated? There should be someone neutral doing this data.
Why do we not include grocery prices and gasoline prices??
BoDrax | 14 hours ago
They dont include it because it would tell the true story not their lies.
bunnypaste | 11 hours ago
Yeah, they can't point and say "look how great things are going for the economy! ^for ^one ^specific ^subset ^of ^people!" if they include all relevant costs of living. Gotta omit vital stuff to sell the lie.
Johnfromsales | 12 hours ago
They do include them. https://www.bls.gov/news.release/cpi.t01.htm
zephalephadingong | 10 hours ago
Different ways of measuring the data is useful for different things. Including gas prices does not help the Fed decide whether to increase or decrease interest rates. It's not like they can end the war in Iran afterall.
Having said that, there is a measurement of inflation that includes gas and food. It just isn't as useful for the Fed, so people talk about it less
Johnfromsales | 12 hours ago
It does include grocery and gasoline prices. https://www.bls.gov/news.release/cpi.t01.htm
Food at home (groceries) and gasoline are clearly listed.
082426grateful | 14 hours ago
Those who don’t notice inflation as much, and may even benefit as their businesses that they own and investments they have made, also eat. Also need fuel. Also like to insure themselves.
And those are the items that are continually rising.
bunnypaste | 11 hours ago
So they're only not caring about it because what's economically good for one population (successful business owners) is bad for the others? That makes sense. I see people regularly choosing to not care about about things unless they benefit from it personally or it affects them negatively. People just overall don't seem to care about harms that they don't experience...
082426grateful | 10 hours ago
It’s the intersection of capitalism and socialism. It’s where balance can be achieved, and still preserve the overall economic system.
I want to be optimistic, but this isn’t a time where optimism is easy to find.
ForBirmingham205 | 13 hours ago
A friend of mine wen to Walmart this morning to get groceries..He texted me this right here. Word for word. He is a mid level employee for a regional public traded bank that analyzes real estate loans..
"He texted me that real inflation is 25%. I just went to Walmart. Stuff I buy on a regular basis has increased 25% from last year..Just spent $140 on groceries that might last 5 days.."
He has a wife and 3 kids under 24
Hater_Hatesaton | 4 hours ago
They swap out food that gets too expensive for cheaper alternatives. It makes sense, as this is what people do too, but it means food inflation naturally reads way lower than what it really is. You stopped buying those chips, that meat, and your favorite cereal because they doubled in price? Oh well, that doubling is irrelevant because it's out of your list and, consequently, out of the food basket too. Then this data more or less gets used to tell you "it's all in your head, not even worth addressing beyond this really. inflation is pretty tame, the data is worth much more than your anecdote (previous staples being measuredly much more expensive)."
bunnypaste | 11 hours ago
Sounds close to right. $140 in groceries lasts my family of 3 about a week. In 2009, $100 fed me for 2 weeks... and I wasn't buying cheap stuff back then like I am now. It doesn't help that other people eat my families' food out from under me...
OrangeJr36 | 13 hours ago
There's no reason to believe that inflation and wage data is anything but accurate. All of the former BLS commissioners have said the same and the current head is one of the most experienced and qualified members of the agency.
General-Interest5321 | 13 hours ago
I'm not an economist, just a guy that reads the news, but methodology "adjustments" always resulting in inflation being lower than before feels like a reason to me. If changes in methodology are only done to make recording more accurate, one would think the number would occassionally go up afterwards. Otherwise, it gives the appearance that evaluation of the methodology and proposed changes are only done in order to produce a more favorable result. Not that anyone in government would do something like that...
OrangeJr36 | 12 hours ago
The underlying trend before trade wars and real wars was disinflation. If you're using different measurements to get to base level trends, you're going to end up showing disinflation.
General-Interest5321 | 12 hours ago
That makes sense, assuming that a theoretically "correct" change is disinflation. Sorry, the complexity of the topic is a little difficult for me to discuss clearly in writing. I guess my point was less that a change in methodology is incorrect and more that the resulting appearance of changes to it over time can create a reason for a layperson to be skeptical of the number whether that reason is correct or not and I think trust and sentiment do have a material effect on the economy. Cheers!
WonderButtBrace9000 | 12 hours ago
Which methodology adjustments are you talking about?
Actually, just share the news you’ve been consuming. I’m always down for a good in-depth methodology article by some economics wonk which is what you read, right?
Definitely wasn’t some X account or an anonymous blog by DARKTRADINGPOOLFTX right?
General-Interest5321 | 12 hours ago
Well, I don't consume the news. I read it and afterwards it's still there for the next person. I mean, if you're actually interested here is a link from a quick google search supporting the point:
https://www.marketplace.org/story/2026/08/20/will-changes-to-pce-methodology-affect-fed-rate-decision
If your intent was just to "gotcha" someone then enjoy Reddit, I guess.
Johnfromsales | 12 hours ago
In 1996, the bipartisan Boskin Commission published a report stating that the current CPI methodology overstated inflation by about 1% per year. Since then, economists have made 14 adjustments to how the CPI is calculated. A majority of these had the effect of slightly lowering measured inflation, but it’s also true that a few of these adjustments had the opposite effect. Nevertheless, since the old methodology had been shown to overstate inflation, it’s expected that most adjustments would work to bring that number down. https://www.nber.org/system/files/working_papers/w12311/w12311.pdf
General-Interest5321 | 11 hours ago
Interesting, thanks for the information! My perception, just based on what I've noticed over the years, was that it always seems to result in a lower reported inflation number. Happy to know that's not strictly correct when it means I can dial back the cynicism a bit.
Johnfromsales | 11 hours ago
You’re very welcome!
Johnfromsales | 12 hours ago
Which expenses are those?
BlueBerry_Cream_Pie | 6 hours ago
My $80k salary at my F500 company isn't hacking it anymore.
I do $240M in annual revenue per year and yet they cannot / will not give me salary raises. We literally just spent a few hundred million in cap ex on a new project that we have in the pipeline.
I've put my LinkedIn on notice about two weeks ago, putting myself out there for recruiters and I'm already getting interviews left and right for roles that are higher in scope and also higher in pay.
I'm trying to not get left behind in this great inflationary environment. I honestly think we're headed toward economical disaster. Been socketing money away in my HYSA in case of layoffs or major downturns in the economy.
MalikTheHalfBee | 13 hours ago
As a non-American - it’s always funny reading these comments of how awful they have it when Americans still have the most disposable income of any group of humans on earth (yes median measurement) (yes, even after taking into account all in kind social transfers), yet reading Reddit you’d assume they are among the poorest people. Americans truly have no concept of how much more frugally a European lives let alone those in less developed countries
For some reason this fact always infuriates people online too 🤷♀️
iJustSeen2Dudes1Bike | 13 hours ago
I am American but I have lots of family in South America and it's true. Most Americans have 0 clue how much worse things can actually get. My mother in law works for the equivalent of $500 a month with 3 kids at home. The norm over there is to live with your kids when you get older and die without a penny to your name. Yet people over here think they have hit rock bottom when they can't afford an apartment and a car on their hourly wage.
sleeplessinreno | 11 hours ago
This ideology stems from a post ww2 era boom and policy decisions during that time. And the people who actually lived that life passed it to their children who then reaped the benefits while dismantling and siphoning the things that helped the people live it. What didn't change was the story they lived. They romanticized it and promised their children if they just follow the same path they will live a similar life. But by that time period nobody was paying attention to the cracks in the foundation that were forming because of the dismantling, because things were alright.
Fast forward a couple decades from that point and we are at the end game of the dismantling. It will only continue to degrade for the majority of people. The people complaining are people who don't have an understanding of that type of life for the most part. Or what came before and how life in the US was like. So if we continue down the path we are on it's gonna get real ugly real fast for people who don't have proper understanding of poverty. And getting out will take a lot work, willpower and unity for it to happen. Clearly we are not at that stage quite yet, and I fear it is going to be a brutal path to recovery that may never happen in my lifetime.
iJustSeen2Dudes1Bike | 7 hours ago
Yep. Lots of people are going to realize poverty is not "I can't afford to doordash my meals"
MalikTheHalfBee | 2 hours ago
Yea can easily live a post ww2 lifestyle very cheaply. Small, barebones house, 1 barebones vehicle, very little diet variety, very little consumer ‘stuff’, poor healthcare, etc, etc
Dortmunddd | 11 hours ago
This is very true, although to be in the US and can’t afford an apartment or car for the US is… pretty low.
bunnypaste | 11 hours ago
This is a dismissive "starving kids in Africa" argument.
iJustSeen2Dudes1Bike | 7 hours ago
It's not and you're missing my point. Most Americans seem to have an attitude of "oh my God we've hit rock bottom" without realizing there's still a looong way to fall.
bunnypaste | 11 hours ago
I don't think we should play in the oppression Olympics. My problems do not disappear when yours get worse.
Scrandon | 4 hours ago
Funnily enough in this case they actually do, because these problems are not objective, they’re relative. If you compared your situation to medieval times you’d feel richer than a king. There’s really no objective standard of living that’s gonna make someone happy. And if there was we’d be well beyond it already. People are always gonna compare themselves to what others have.
The10KThings | 11 hours ago
You also have more evenly distributed wealth and real social safety nets like healthcare. Most Americans would happily trade places with someone in Europe. I doubt you’d do the same. American poor is soooo much worse than European poor.
bunnypaste | 10 hours ago
Gee, I sure hate being in the last "developed" country that refuses to offer it's citizens these things. The culture war is incredibly stifling right now, too.
No-Wasabi-70 | 8 hours ago
I’d honestly love to move to Europe. I’ve been driving a train for about five years, I bet they’d let me in somewhere
terraphantm | an hour ago
Most Americans would happily make the trade, but outside of the absolute poorest they'd probably end up worse off in most cases.
2absMcGay | 13 hours ago
The average European doesn’t understand the gap between the average rural West Virginian and the average business owner in the Hamptons
Means are useless in American microeconomics
Johnfromsales | 12 hours ago
Are you aware of the difference between the mean and the median?
iJustSeen2Dudes1Bike | 7 hours ago
That's why you always hear median statistics, genius....
MalikTheHalfBee | 13 hours ago
Luckily it’s a median measurement to account such disparities
2absMcGay | 13 hours ago
It doesn’t but believe what you like from 5000 miles away
MalikTheHalfBee | 13 hours ago
If you don’t understand how such measurements work no amount of miles closer to you will help 🤷♀️
iJustSeen2Dudes1Bike | 7 hours ago
Jesus these types of people vote
Scrandon | 4 hours ago
Except that’s not true in my understanding. Can you provide a source? Maybe it’s the disposable income part that’s inconsistent with my understanding, which was based on total income.
YouTube: The US is NOT a wealthy country: This is the real data
MalikTheHalfBee | 3 hours ago
Here’s a chart: https://www.reddit.com/r/charts/comments/1sgt5an/median_equivalised_household_disposable_income_by/
Here’s a map: https://worldpopulationreview.com/country-rankings/disposable-income-by-country
press_Y | 11 hours ago
Because losers on this website like to make excuses for their station in life
Tribe303 | 11 hours ago
Canadian here. If you are looking at just the numbers, you aren't seeing the full story in the US. There are only a few Mega rich people at the top of the food chain and they are so obscenely wealthy, they throw the numbers off. If you removed the top 1% richest, and re-ran the math on this new dataset, you'll be much closer to the real story.
MalikTheHalfBee | 11 hours ago
Why does no one know what a median measurement means 🤦♂️
the_stalking_walrus | 11 hours ago
Because they want to be upset, not right. They're basically economic anti-vaxxers.
Tribe303 | 8 hours ago
I know what a median measurement is. I did not use the term because I think it's safe to assume that the audience here is American. 3 syllable words confuses you guys, so I try to use words with 2 syllables or less! 🤣
sleeplessinreno | 10 hours ago
Because like 15% of the working population makes at or above median wage.
zephalephadingong | 10 hours ago
That is literally impossible. The way median works, 50% of the working population HAS to make at or above it.
sleeplessinreno | 10 hours ago
Well, since you wanted to hover at the median I stuck close to it. I didn't touch on the remaining 35% above median. How was I suppose to know you wanted the entire population distribution of above median?
zephalephadingong | 10 hours ago
I'm not sure what this is supposed to mean. You said 15% of workers make at or above the median because you were excluding the other 35% of people that make or above median wages? Why?
sleeplessinreno | 10 hours ago
> Well, since you wanted to hover at the median I stuck close to it.
That was my assumption at least. You're question wasn't very clear.
MalikTheHalfBee | 10 hours ago
No, you just don’t understand what median disposable income is a measurement of
sleeplessinreno | 10 hours ago
Since we're making presumptions; I presume you don't understand population distributions.
MalikTheHalfBee | 10 hours ago
median fixes skewed population distributions by finding actual middle values & prevents extreme high or low numbers from pulling this measurement off-balance.
sleeplessinreno | 9 hours ago
Cool, and I granulated it based on actual population distribution. What is more fascinating is that below median and below poverty is nearly and equal 50/50 split.
Scrandon | 4 hours ago
LOL… NA education, folks.
sleeplessinreno | an hour ago
I would tend to disagree. I tend to look at more abstract concepts than just being a math nerd. Clearly, this magic median isn't the end all be all, and doesn't really address much other than being a number to point at.
SentientSquare | 9 hours ago
Canadian schools should teach the concept of “median”
Tribe303 | 9 hours ago
I know what a median is. I didn't use it because I assume the audience here was American. 🤣
Scrandon | 4 hours ago
Dude, your entire post shows you have no idea what a median is. The top 1% does not affect the median at all, in any way. And then your replies are you just feeling undeservedly superior.
Tribe303 | 3 hours ago
Where does this post say it's using the median?
Scrandon | 2 hours ago
The first comment of the chain we’re in! The one you replied to. First day on Reddit or what?
adumblittlebaby | 11 hours ago
OP learns about relativity without any of the understanding of nuance that goes with it. Great job little guy, you’re slowly getting there.
“My dismissal of problems based on the existence of a theoretical worse problem isn’t viewed kindly it must be others who are stupid!!”
Exotic-Protection729 | 13 hours ago
Wya
No-Wasabi-70 | 8 hours ago
Pain isn’t subjective.
_FellowTraveller_ | 10 hours ago
Seems that people should be voting for candidates that promise and follow through on a balanced budget. Inflation hurts the poor more than anyone else.
Flincher14 | 10 hours ago
There was a year in a half from 2023 to 2025 where wages were briefly outpacing inflation..then Biden was out and Trump was in and here we are.
samhouston84 | 6 hours ago
In other news, whatever water touches gets wet.
Vote MAGA people, that’s the surest bet to get a hard reset! Everything will go bankrupt and bring back the good old days!
variegated68409 | 13 hours ago
Actually wages are outpacing inflation once you adjust for energy, food, medical care services, shelter, and new and used cars. This is truly the most prosperous and resilient economy to have ever existed, and all who claim otherwise are clueless doomers undoubtedly pushing some sort of mentally ill cult-like agenda.
bunnypaste | 10 hours ago
/s?
TheThousandMasks | 10 hours ago
I was waiting for it too, but they’re a red scare podcast follower. Pretty much guaranteed mindrot. I wouldn’t want this guy as my accountant right now, that’s for fucking sure lmao.
Scrandon | 4 hours ago
Haha no way. I was sure it was satire once they got to healthcare, shelter, and cars. That’s unreal.