Our current inflation isnt driven by wage increases. It's corporations jacking up prices to maximize profits

[JEDI]

Robert Reich

How Corporations are Using Inflation to Take Your Money Corporations are using inflation as an excuse to raise their prices, hurting workers and consumers while they enjoy record profits. Prices are...

robertreich.org

(Robert Riech was Bill Clinton's Secretary of Labor.)

Corporations are using inflation as an excuse to raise their prices, hurting workers and consumers while they enjoy record profits.

Are they using these record profits to raise their workers’ real wages?
No.
They’re handing out meager wage increases to attract or keep workers with one hand, but effectively eliminating those wage increases by raising prices with the other.

Wages grew 5.6 percent over the past year — but prices rose 8.5 percent.
That means, adjusted for inflation, workers actually got a 2.9 percent pay cut.


Normally I agree with him, but there's one point that's kinda hard to swallow:
- corporations coordinate price increases

isnt that price fixing and already illegal?

 

[DaaQ]

3.1% wage increase here, and I missed out on the .25 cents an hour raise for completing a required class before the "blackout date" for the annual reviews. Completed the class first week of June, just got the 3.1% on last Fridays check. Still no +.25 cents.

For those that make middle or upper class money. Twenty five cents an hours equals 10 dollars a week.

 

[dank69]

...
(Robert Riech was Bill Clinton's Secretary of Labor.)

So he eats babies?

...

isnt that price fixing and already illegal?

If you can prove it.

 

[Thump553]

OTOH you have Mitch McConnell blaming inflation (and everything else that is bad) on lazy bums still living off their covid checks from a couple of years ago.

Unfortunately Reich is basically right. The core problem is the misbalance of power between employers/corporations and employees/consumers.

If only so-called populist politicians actually focused on what really matters to the little guys bottom line instead of hot button emotional issues we'd be a hell of a lot better off.

 

[sportage]

Yeah, old Mitch is pissed that people took some of Mitch's money. It is his money, right? All of it? Biden called it stimulus, Mitch called it wasted money on losers.

But I think what happened during Obama has a lot to do with this price gouging outrage. Obama wanted a $15 minimum wage. He didn't get his minimum wage, however businesses were "shamed" into raising wages on their own and what we are now seeing is the pushback.

Businesses put up with providing a higher wage until they wanted revenge, and that revenge came in the form of higher prices.
So if that new employee will not work for less than $15 an hour, and Walmart must offer $15 to that new employee, then Walmart will respond by raising the price on every product by one or two dollars each and every item.

Sure, it's not fair. And sure, it all comes down to greed. And so, if the public is now paying $5 for that once sold for $2.50 loaf of bread then the working public now needs not $15 but $17 or $18 an hour to afford the rising costs of food and goods.

So eventually, Walmart raises their starting wage to $17 or $18 an hour just to get workers into the stores. And again, out of greed and revenge Walmart raises that loaf of bread up even more to $7 a loaf. Or maybe $8.
And on and on it goes.... Where it stops, nobody knows.

 

[pmv]

Surely it doesn't have to be deliberate collusion a.k.a price fixing? Maybe what happens is an external 'shock', like the war in Ukraine or the resumption of demand post-COVID, creates supply shortages, and hence a legitimate impetus to raise prices. But, every company experiencing this effect simultaneously leads to an overshoot - where they all simultaneously get the same idea that they could maybe increase prices a _little_ more than is strictly necessary, and blame it on the external factors. Knowing that their competitors are likely to be thinking the same thing.

I don't know, it does sound as if 'market competition' would make raising prices hard, due to being undercut by rivals, but perhaps psychological factors mean when the driver for increasing prices is very widely-reported and known about, there can be a tendency to overshoot?

 

[Uhtrinity]

Why can't it be lots of things combined?

Trump Tariffs, Covid shutdowns / interruptions, stimulus, supply chain interruptions, Putin & Ukraine, and corporates greed. It's a pretty complex issues. John Oliver just did a really good video on the topic.

 

[Lezunto]

I'll let the bean counters delve into the numbers.

When gasoline pump prices rose sharply and angry folks were blaming President Biden, labeling him incompetent, weak and a failure, I responded that no President can, with any degree of success, control retail prices of gasoline and diesel fuel.

That what they were complaining about was the result of price gouging and greed.

And that in time, these prices would start to slowly decline.

 

[Moonbeam]

Any cure to wealth inequality and inflation would be socialism. In America the poor own TVs. We are lucky to have what we have and should never complain. When you help the poor you just make them lazy, actually lazier than they already are. We have the conservative right to thank for all our blessings.

 

[shortylickens]

Until we fight back it will only get worse.
We need larger unions. Like a nationwide waiters union. And fast food union. And retail union. We need to scare the shit out of the billionaires and CEO's. Can you imagine how much money they'd lose if 10 million workers went on strike every time they tried to ass fuck us?

 

[brycejones]

OP sounds like a communist.

 

[fskimospy]

I don't really get the idea that inflation is driven by corporate greed. Is the idea that they weren't greedy from 2008 through 2021 and then became greedy? They've always been greedy so if corporate greed is your theory behind inflation then you need to explain why they couldn't have coordinated price increases before.

 

[Roger Wilco]

Strong inflation is happening worldwide though, with many developed countries facing far higher inflation—I still haven’t seen/read anything that convinces me of one primary causal factor.

 

[brycejones]

Strong inflation is happening worldwide though, with many developed countries facing far higher inflation—I still haven’t seen/read anything that convinces me of one primary causal factor.

Lots of disruptions in various parts of the supply chain for many industries that keep disrupting markets like waves on a pond changing direction when they are reflected off the sides. Those disruptions causes shortages which drive prices higher. Since companies are going to try and keep their margins intact and demand has not declined so I am not surprised by corporations reporting higher profits.

 

[KMFJD]

Don't worry, the democrats are fighting for you!

https://twitter.com/x/status/1552294858840330246

The text of @RepCuellar's bill the Workplace Flexibility & Choice Act is available. It would carve workers out of min wage & OT protections -- not just app-deployed workers -- ANY WORKER whose employer
Decided that they would set schedules using algorithms & incentives instead of providing secure hours WOULD NO LONGER HAVE TO PROVIDE A WAGE FLOOR or OVERTIME.

thank Nancy Pelosi for him btw, her and the rest of the fygm dems endorsed his indicted ass over a progressive ant-abortion candidate (who lost the primary by a couple of hundred votes)

 

[dank69]

I don't really get the idea that inflation is driven by corporate greed. Is the idea that they weren't greedy from 2008 through 2021 and then became greedy? They've always been greedy so if corporate greed is your theory behind inflation then you need to explain why they couldn't have coordinated price increases before.

My theory is that when inflation started hitting that was a window for corporations to raise prices without drawing the ire of consumers because they could blame it on inflation. Once a few figured it out others took note and it became standard procedure in corporate circles quickly.

 

[dank69]

Don't worry, the democrats are fighting for you!

https://twitter.com/x/status/1552294858840330246

The text of @RepCuellar's bill the Workplace Flexibility & Choice Act is available. It would carve workers out of min wage & OT protections -- not just app-deployed workers -- ANY WORKER whose employer
Decided that they would set schedules using algorithms & incentives instead of providing secure hours WOULD NO LONGER HAVE TO PROVIDE A WAGE FLOOR or OVERTIME.

thank Nancy Pelosi for him btw, her and the rest of the fygm dems endorsed his indicted ass over a progressive ant-abortion candidate (who lost the primary by a couple of hundred votes)

How many Democrats support it as is? How do you know it wasn't just an oversight that will soon be corrected?

 

[Leeea]

Robert Reich

How Corporations are Using Inflation to Take Your Money Corporations are using inflation as an excuse to raise their prices, hurting workers and consumers while they enjoy record profits. Prices are...

robertreich.org

(Robert Riech was Bill Clinton's Secretary of Labor.)

Corporations are using inflation as an excuse to raise their prices, hurting workers and consumers while they enjoy record profits.

Are they using these record profits to raise their workers’ real wages?
No.
They’re handing out meager wage increases to attract or keep workers with one hand, but effectively eliminating those wage increases by raising prices with the other.

Wages grew 5.6 percent over the past year — but prices rose 8.5 percent.
That means, adjusted for inflation, workers actually got a 2.9 percent pay cut.


Normally I agree with him, but there's one point that's kinda hard to swallow:
- corporations coordinate price increases

isnt that price fixing and already illegal?

Why is any of this a problem?

In order for capitalism to work, companies need to be able to set their prices according to demand. If the demand is there, let them raise their prices. Supply will grow to catch up.

- corporations coordinate price increases

Is that actually illegal?

Perhaps they seeing their partner raise prices, realizing they can do the same, and also raising prices? This is 100% legal.

There is a difference between plotting in the backroom and realizing your product is priced below its marketplace value.

hurting workers and consumers while they enjoy record profits.

Would we be better off keeping prices low and having empty shelves?


Is it even possible to keep prices low? or does that just generate a bunch of scalpers and a poorer customer experience. Look at GPUs, units being sold at MSRP had no effect on what people could actually buy them for. It resulted in violent gangs of scalpers viciously attacking unprepared customers. How is that any better?

Do you really want to create a mafia class of violent scalpers?

 

[Leeea]

OP sounds like a communist.

The shit kind of communist that ruins economies and destroys societies.

 

[Leeea]

Sure, it's not fair. And sure, it all comes down to greed. And so, if the public is now paying $5 for that once sold for $2.50 loaf of bread then the working public now needs not $15 but $17 or $18 an hour to afford the rising costs of food and goods.

The Russian's are burning Ukraine's grain shipments, destroying the grain export ports, and destroying ships transporting grain. A billion people are going into famine. And you are complaining bread is $5 a loaf?

When supply goes down, demand increases, and prices go up.


In the case of bread, yes the people who supply it will get paid more. Including walmart workers. And yes, cushy software engineers will not have their wage increase also, because they have nothing to do with bread supply. So they will not be able to buy as many loafs of bread.

System working correctly and the only way it can.

 

[Leeea]

Any cure to wealth inequality and inflation would be socialism. In America the poor own TVs. We are lucky to have what we have and should never complain. When you help the poor you just make them lazy, actually lazier than they already are. We have the conservative right to thank for all our blessings.

Socialism?

The cure to wealth inequality is providing providing subsidies for services that do not respond well to market forces outside of the capitalistic system. Healthcare, Education, Food, Housing, etc. Paying for said subsidizes through taxes on the people with the greatest wealth inequality.

Price controls of any type are complete madness! So what if the price of a TV doubles? Attempting to run a planned economy is doomed to corruption and malfeasance.

 

[fskimospy]

Why is any of this a problem?

In order for capitalism to work, companies need to be able to set their prices according to demand. If the demand is there, let them raise their prices. Supply will grow to catch up.

Is that actually illegal?

Perhaps they seeing their partner raise prices, realizing they can do the same, and also raising prices? This is 100% legal.

There is a difference between plotting in the backroom and realizing your product is priced below its marketplace value.

Would we be better off keeping prices low and having empty shelves?


Is it even possible to keep prices low? or does that just generate a bunch of scalpers and a poorer customer experience. Look at GPUs, units being sold at MSRP had no effect on what people could actually buy them for. It resulted in violent gangs of scalpers viciously attacking unprepared customers. How is that any better?

Do you really want to create a mafia class of violent scalpers?

I think there's a level of corporate consolidation in America that has hurt competition and kept wages lower and prices higher than they would be in a truly competitive market.

That being said, the answer is not price controls or any crazy crap like that, the answer is antitrust and breaking these companies up to improve competition.

 

[Lezunto]

I really wish some evening talk show host would hire Moonbeam to write a few political jokes and keep him on a retainer.

Pardon me, if I got the gender wrong.

 

[Moonbeam]

Socialism?

The cure to wealth inequality is providing providing subsidies for services that do not respond well to market forces outside of the capitalistic system. Healthcare, Education, Food, Housing, etc. Paying for said subsidizes through taxes on the people with the greatest wealth inequality.

Price controls of any type are complete madness! So what if the price of a TV doubles? Attempting to run a planned economy is doomed to corruption and malfeasance.

The ‘services’ that do not respond well to market forces are those dependent on human decency, ordinary gentle modest simple people. The market force you worship here is the mental illness caused by pathologically induced and artificially created needs, the longing to fill the hole in our souls put there by self hate. The emptiness can never be filled We need more and more and the dream is endlessly propelled by the fear that what we need is limited.

What Reich did was draw out in simple pictures the external inevitabilities of that less understood psychological process and offer solutions to ameliorate the effects. Greater regulation and breaking up excessive aggregation, in my opinion are at the top of the list.

But there is the small matter of cultural mind set, where we have a culture already deeply infected with the fear of socialism. I define that as wishing for others what your best in self would wish for you.

 

[Moonbeam]

I really wish some evening talk show host would hire Moonbeam to write a few political jokes and keep him on a retainer.

Pardon me, if I got the gender wrong.

Is a retainer that thing they put over a dogs muzzle to keep it from biting people. Probably shouldn’t have used the word ‘worship’ as I did above. Improper assumption on my part.