You've heard it from the nation's leading political commentators. You've heard it from your half-buzzed uncle after Thanksgiving dinner: Inflation "eats away at real wages." Bullshit.
Isn't it a bit disingenuous to use a "national income" pie nowadays? I tend to agree with you that most of the people who claim to care about the "simple" worker with the real wage argument are frauds, but there has to be a better definition of so called basic necessities. I think the only way people who really care about the working class can help them would be by compiling some alternative index that tracks exclusively things like rent/mortgage payment + healthy food items + utilities etc. and comparing their annual changes with each worker's wage over the past 12 months or so to get a clear picture. This is especially important in an economy like that of the US because so much of the glorified GDP is just phantom income/wealth.
After more accurately measuring the effect of rising prices on a worker's income, we can also address questions about "the national pie".
I'm down with your main point: Those who have money have a lot more to lose from inflation than those who don’t. However, how much of what we see there in the post WWII history is based on the automatic COLAs in union contracts? Those have been lost, largely, replaced with percentage gains which in the face of inflation are laughably small. Our insulation has been stripped away, perhaps? -- Jenny Brown
The chart *does* show the income share of the bottom 50% goes up with higher inflation, which is good.
But the question is, is the increase in income greater than the inflatíon?
Maybe income share goes up, but the actual income gains are less then the rate of inflation. Then the bottom 50% is still losing ground because of the inflation.
Isn't it a bit disingenuous to use a "national income" pie nowadays? I tend to agree with you that most of the people who claim to care about the "simple" worker with the real wage argument are frauds, but there has to be a better definition of so called basic necessities. I think the only way people who really care about the working class can help them would be by compiling some alternative index that tracks exclusively things like rent/mortgage payment + healthy food items + utilities etc. and comparing their annual changes with each worker's wage over the past 12 months or so to get a clear picture. This is especially important in an economy like that of the US because so much of the glorified GDP is just phantom income/wealth.
After more accurately measuring the effect of rising prices on a worker's income, we can also address questions about "the national pie".
I'm down with your main point: Those who have money have a lot more to lose from inflation than those who don’t. However, how much of what we see there in the post WWII history is based on the automatic COLAs in union contracts? Those have been lost, largely, replaced with percentage gains which in the face of inflation are laughably small. Our insulation has been stripped away, perhaps? -- Jenny Brown
Couldnt inflation still hurt workers in the short run? As a low income worker im pretty sure it does.
The chart *does* show the income share of the bottom 50% goes up with higher inflation, which is good.
But the question is, is the increase in income greater than the inflatíon?
Maybe income share goes up, but the actual income gains are less then the rate of inflation. Then the bottom 50% is still losing ground because of the inflation.