Inflaaaaaaaation

[dismalist]

I never said it was a zero-sum game. Still, wages (and wealth) are set by power, not by productivity.

Wages are set by productivity. People want to make profits. They gotta pay workers to make profits. :-)

Walmart has to worry about its power every day. It keeps competitors at bay by charging low prices. As does Microsoft. US Bureau of Labor Statistics says that the price of an I-phone has dropped substantially in the last year. Low power, really.

Put differently, high profits are a sing of serving customers well, not a sign of theft.

Power? Why should firms have more power to raise prices, and increase wages less than prices, in the last three years? Did they suddenly realize they had power? Were they stupid beforehand?

Power as an explanation of price setting is like the phlogiston explanation of combustion.

[ciao_yall]

I never said it was a zero-sum game. Still, wages (and wealth) are set by power, not by productivity.

Wages are set by productivity. People want to make profits. They gotta pay workers to make profits. :-)

Walmart has to worry about its power every day. It keeps competitors at bay by charging low prices. As does Microsoft. US Bureau of Labor Statistics says that the price of an I-phone has dropped substantially in the last year. Low power, really.

Put differently, high profits are a sing of serving customers well, not a sign of theft.

Power? Why should firms have more power to raise prices, and increase wages less than prices, in the last three years? Did they suddenly realize they had power? Were they stupid beforehand?

Power as an explanation of price setting is like the phlogiston explanation of combustion.

High profits are also a sign of market power.

And, companies find the profit maximization part of the curve. Some have found, such as in the case of fuel, that consumers are willing to tolerate very high prices because the alternatives are unacceptable. Like... quitting one's job because the commute costs are too high.

[dismalist]

I never said it was a zero-sum game. Still, wages (and wealth) are set by power, not by productivity.

Wages are set by productivity. People want to make profits. They gotta pay workers to make profits. :-)

Walmart has to worry about its power every day. It keeps competitors at bay by charging low prices. As does Microsoft. US Bureau of Labor Statistics says that the price of an I-phone has dropped substantially in the last year. Low power, really.

Put differently, high profits are a sing of serving customers well, not a sign of theft.

Power? Why should firms have more power to raise prices, and increase wages less than prices, in the last three years? Did they suddenly realize they had power? Were they stupid beforehand?

Power as an explanation of price setting is like the phlogiston explanation of combustion.

High profits are also a sign of market power.

And, companies find the profit maximization part of the curve. Some have found, such as in the case of fuel, that consumers are willing to tolerate very high prices because the alternatives are unacceptable. Like... quitting one's job because the commute costs are too high.

Ah, yes marke power. Of course they are! But to use market power to explain an increase in the general price level means market power would have to increase across the board. If anything, the opposite has been happening. There's no market power in the egg industry. Or, in the case of oil, violently fluctuating market power. Hard to believe.

One must look elsewhere to explain inflation.

[ciao_yall]

I never said it was a zero-sum game. Still, wages (and wealth) are set by power, not by productivity.

Wages are set by productivity. People want to make profits. They gotta pay workers to make profits. :-)

Walmart has to worry about its power every day. It keeps competitors at bay by charging low prices. As does Microsoft. US Bureau of Labor Statistics says that the price of an I-phone has dropped substantially in the last year. Low power, really.

Put differently, high profits are a sing of serving customers well, not a sign of theft.

Power? Why should firms have more power to raise prices, and increase wages less than prices, in the last three years? Did they suddenly realize they had power? Were they stupid beforehand?

Power as an explanation of price setting is like the phlogiston explanation of combustion.

High profits are also a sign of market power.

And, companies find the profit maximization part of the curve. Some have found, such as in the case of fuel, that consumers are willing to tolerate very high prices because the alternatives are unacceptable. Like... quitting one's job because the commute costs are too high.

Ah, yes marke power. Of course they are! But to use market power to explain an increase in the general price level means market power would have to increase across the board. If anything, the opposite has been happening. There's no market power in the egg industry. Or, in the case of oil, violently fluctuating market power. Hard to believe.

One must look elsewhere to explain inflation.

So, eggs were a temporary price shock. If there are only a few egg producers they can signal, without colluding, to allow prices to increase. Grocery stores, of which there aren't many with all the consolidation of the industry, know they can raise prices to a certain point without losing too many sales.

To look at overall inflation, consider fuel. Oil prices affect everything, from the price of plastic to transportation of goods. Again, not many producers, demand is fairly fixed regardless of price.

[dismalist]

There are thousands of egg producers! There is no market power.

Consider fuel prices? Yes. Not that it affects everything: Everything affects everything! Big oil consists of five companies. Some years their prices go up, some years they go down. Their monopoly power is not changing from year to year.

But back to the fundamental point: A theory of price changes for individual prices, and there are untold numbers of prices, cannot explain inflation, which is a rise in the overall price level. Otherwise, one would have to say that firms were stupid beforehand and now got smart.  Incroyable!

[kaysixteen]

I'm going to try to be charitable.   Baby Boomers who came of age in a world that is simply vastly different from today's world, often do not seem to get basic economic realities that afflict the lower orders, and the younger folks whose world in almost all respects has been much harder on them than the Boomers' was.   Lemme see:

1) irrespective of the expense incurred *to move*, in many places in this country, people are stuck, because they simply cannot move anywhere that would be cheaper to live than where they are living now.   And both the new place and the old place are probably dumps, too.

2) Obviously high benefits need to be factored in when considering how much one actually earns.   Thing is, most lower-income folks get far fewer bennies than their BB grandparents did in the 70s.   Many lower-income folks get no benefits to speak of, at all.

3) Around 18% of the food stamps issued in this country are spent at Walmart, which is essentially a crony capitalism/ corporate welfare driven outfit.  Who should pay for Walmart employees' food and health care?   Hint: maybe 'the taxpayers' ain't necessarily the most moral answer.

4) There are thousands of farms that raise eggs, but very few national distributors of those eggs.   These middle men more or less get almost all the profits.

[dismalist]

I'm going to try to be charitable.   Baby Boomers who came of age in a world that is simply vastly different from today's world, often do not seem to get basic economic realities that afflict the lower orders, and the younger folks whose world in almost all respects has been much harder on them than the Boomers' was.   Lemme see:

1) irrespective of the expense incurred *to move*, in many places in this country, people are stuck, because they simply cannot move anywhere that would be cheaper to live than where they are living now.   And both the new place and the old place are probably dumps, too.

2) Obviously high benefits need to be factored in when considering how much one actually earns.   Thing is, most lower-income folks get far fewer bennies than their BB grandparents did in the 70s.   Many lower-income folks get no benefits to speak of, at all.

3) Around 18% of the food stamps issued in this country are spent at Walmart, which is essentially a crony capitalism/ corporate welfare driven outfit.  Who should pay for Walmart employees' food and health care?   Hint: maybe 'the taxpayers' ain't necessarily the most moral answer.

4) There are thousands of farms that raise eggs, but very few national distributors of those eggs.   These middle men more or less get almost all the profits.

Yes, poverty sucks. Nothing to do with inflation, though.

As for bennies, I'm sure low wage earners get more stuff nowadays than they ever did 50 years ago.

As I said, Walmart has done more for poor people than -- well, anything except running water and sewage systems! The numbers provided show that Walmart is favored by the poor, and for good reason: It's cheaper than the competitors!

Yes, those middle men! Thank goodness we don't have to hatch the eggs ourselves.

No firm is stealing anything from us. The thought that they are seems hard wired into our psyche from 40 000  years ago. We are not a family; we are a society. We are exchanging, not stealing.

[kaysixteen]

Ah yes, Walmart the friend of the working class.   Buy cheap 3d world crap to cause the Americans' factories to shutter, then happily take the working man's welfare bennies in payment for said cheap crapola.  Win-win!

[quasihumanist]

Ah yes, Walmart the friend of the working class.   Buy cheap 3d world crap to cause the Americans' factories to shutter, then happily take the working man's welfare bennies in payment for said cheap crapola.  Win-win!

Buying cheap 3d world crap benefits the workers in those 3d world countries, who need it a lot more than laid off American workers.

I unashamedly believe that workers in Vietnam are just as important as workers in the US.

[ciao_yall]

Ah yes, Walmart the friend of the working class.   Buy cheap 3d world crap to cause the Americans' factories to shutter, then happily take the working man's welfare bennies in payment for said cheap crapola.  Win-win!

Buying cheap 3d world crap benefits the workers in those 3d world countries, who need it a lot more than laid off American workers.

I unashamedly believe that workers in Vietnam are just as important as workers in the US.

Agree. There is a reason why the Fortune Global 500 is (1) Dominated by mass market retailers and oil companies; and (2) The WTO takes a hands-off approach to global labor and environmental laws.

Let's also remember that Wal-Mart keeps prices low by keeping wages low, then sending its workers out for food stamps, housing assistance and public health care. Something about an "Honest day's work should pay the bills?"

[paultuttle]

Ah yes, Walmart the friend of the working class.   Buy cheap 3d world crap to cause the Americans' factories to shutter, then happily take the working man's welfare bennies in payment for said cheap crapola.  Win-win!

Buying cheap 3d world crap benefits the workers in those 3d world countries, who need it a lot more than laid off American workers.

I unashamedly believe that workers in Vietnam are just as important as workers in the US.

Agree. There is a reason why the Fortune Global 500 is (1) Dominated by mass market retailers and oil companies; and (2) The WTO takes a hands-off approach to global labor and environmental laws.

Let's also remember that Wal-Mart keeps prices low by keeping wages low, then sending its workers out for food stamps, housing assistance and public health care. Something about an "Honest day's work should pay the bills?"

This is what ticks me off the most--the fact that I'm supposed to subsidize a global conglomerate's workers because the owners/managers don't want to pay a true working wage.

And yes, I do know that I'd have to pay more for goods and services if Walmart didn't exist. But here's the thing: In an ideal world, the world that we should have inherited, workers' wages (including our salaries) would have kept pace with productivity since the 1950s, so that the minimum wage would now be ~$25/hour and our ability to pay for those goods and services would be concomitantly healthy, leaving us in an even longer period of post-WWII prosperity than actually happened (in other words, a period of prosperity continuing into the present).

Instead, though, we voted for oligarchs (and people who sympathized with oligarchs) who were savvy enough to distract us with "religion"/"patriotism"--and, of course, good old racism and classism--so they could emplace and solidify policies and strategies to suppress wages and salaries for middle- and lower-class folks; as a result, we're now finding out what living in a Big Corporate -controlled economy bent on maintaining and even expanding income inequality (otherwise known, especially in the tropics, as a "banana republic") feels like.

:now considering how to select the optimal cardboard box in which to retire on a (future) beach in Orlando:

/snark off

[dismalist]

Alas, guys, your causality is way off.

Walmart pays low wages because it can. That's the labor market. Walmart is tiny compared to the pool of unskilled labor. It's not dictating anything. The workers work there voluntarily at the wage Walmart offers.

The idea that welfare payments contribute to Walmart wages is just about the opposite of the truth. To get food stamps, family income must be below 130% of poverty. Two people working would get the family over poverty and take away food stamps. So, one person will not work. Lower labor supply means Walmart, and others, have to pay more than otherwise, not less. Medicaid is similarly structured.

[jimbogumbo]

Two people working would get the family over poverty and take away food stamps.

Two people working was definitely not needed in the 1950's. Doesn't that in fact help somewhat confirm what paultuttle stated?

[dismalist]

Two people working would get the family over poverty and take away food stamps.

Two people working was definitely not needed in the 1950's. Doesn't that in fact help somewhat confirm what paultuttle stated?

One can have a 1950's standard of living today quite easily: Let's try 1950's medicine at 1950's prices and incomes compared to 2020's medicine at 2020's prices with 2020's incomes. Let's try 1950's wives as cooks compared to take-away food today. Hell, McDonalds was an improvement in many places! [though not in New York :-)] Nobody ever bothered to measure household productivity and compare it to market productivity. And 1950's cars at 1950's prices with 1950's income and so on ... . One gets the picture.

Be that as it may, productivity and earnings [not wages, which are only a part of earnings], properly deflated, as I expounded upthread, have moved together since the 1950's.

[jimbogumbo]

Two people working would get the family over poverty and take away food stamps.

Two people working was definitely not needed in the 1950's. Doesn't that in fact help somewhat confirm what paultuttle stated?

One can have a 1950's standard of living today quite easily: Let's try 1950's medicine at 1950's prices and incomes compared to 2020's medicine at 2020's prices with 2020's incomes. Let's try 1950's wives as cooks compared to take-away food today. Hell, McDonalds was an improvement in many places! [though not in New York :-)] Nobody ever bothered to measure household productivity and compare it to market productivity. And 1950's cars at 1950's prices with 1950's income and so on ... . One gets the picture.

Be that as it may, productivity and earnings [not wages, which are only a part of earnings], properly deflated, as I expounded upthread, have moved together since the 1950's.

One of the problems IMHO with your take is housing availability. Even if a family of 4 were satisfied with the equivalent of the 1953 median income of $4200 (just under $48,000 now), you have a problem finding a house. My hypothetical family qualifies for a $300,000 mortgage, which means that IF you live in one of the urban areas you have trouble finding a home at all. If you move to where the cheaper homes are (if you can afford the upfront moving costs), you can't get a job. Sort of a Catch-22 for hordes of people.