The problem with inflation is that the cat can never go back in the bag. Sure, the Fed says they have inflation "under control" at the moment, but it's still way higher than where pre-covid projections predicted it would be at this time, and real wages have not nearly caught up to the increased prices that literally everyone who earns a paycheck for a living is feeling right now. High cost of groceries and gas will never go back to the way they were, and no matter who ends up sitting in the Oval Office next January, they won't be able to change that fact.
Workers across the country need to wake up and realize that they outnumber the owner class 10,000 to 1. A general strike could grind the entire nation to a halt and then they'll start listening to what we have to say. The politicians in Washington have already signaled that they don't care if average people can't make ends meet and nobody is coming to save us, so we have to take matters into our own hands using the tools proven to work time and time again - worker organization.
An 84-year-old incumbent party-line centrist was running against Hitler, and the left party at the time spent all its time attacking the centrists (they called the establishment left party “the main enemy”), and ran their own third-party candidate in the election, siphoning votes away from the center.
A few years later, Hitler had managed to seize power and most of the leftists were in the camps or dead. They were the first of his targets, even before he started working for real against the Jews.
I’m being a little bit selective about it to emphasize the similarity with today, and glossing over some important differences in the situations. But also, the situations are eerily similar, at the core.
Well, the ramp up to the "Machtergreifung" was, but the actual ascend to power was 1933. Again, just like in the US: Vote in November 2024, inauguration Januar 2025.
But also, the situations are eerily similar, at the core.
Which makes me shiver. I know that most Americans learn only a very limited subset of history in school, and they get even that wrong (How many people in the US still call the civil war the "War of Northern Aggression"?). If I were a history teacher in the US, I would see to add a thorough lecture about first half of 20th century Germany at the next avalable chance. And tell them why American soldiers gave their lives to fight it.
And maybe they should add "The Wave" by Morton Rhue to the literature curriculum, if they have not done that already.
Ask any historian what are the lessons of the 1932 German elections, and they'll tell you: If you're upset about the establishment incumbent, and specifically the state of the economy, it's okay to overlook serious warnings about the other guy
Hindenburg was the centrist incumbent, he didn't go around publicly calling for genocide like Hitler did, but then he placed Hitler and some other Nazis in key leadership positions because he wanted to ally with his party, and two years later Hitler seized power after his death.
Biden has never called for a genocide, yet he has been actively funding one for 8 months while all the progressives in his cabinet are quitting. He seems unbothered by an election loss to Trump so long as the Pentagon's foreign policy succeeds. I wouldn't even be surprised if he dies in the next 2 years considering his health and stress of being president.
People don't understand that Trump is a symptom and not a cause of the system. Even if he loses this election or dies or is disqualified, another equally or even more insane Republican will take his place. Meanwhile Democrats have refused to actually pass sizable progressive policies for 30-40 years. Biden only got to make his $15 minimum wage promise for only federal employees via an executive order because the party fell apart in congress with an actual bill. This will only lead to more republican voters.
Part of the issue is two party politics, but another part is the DNC refusing to combat fascism because surpsise surpise their candidates are funded by huge megacorp lobbyists who want to protect their corporate interests. Biden winning will not fix the problem, and 4 years down the line we will be faced with the exact same scenario.
So there's a pretty concerted effort to make "the economy is actually getting better" stories sound untrue with some particular talking points - it's actually really effective. Here are some of the big ones. You can see why they work.
Replying to "the economy is getting better" with "how DARE you say the economy is good and all the problems are fixed, clearly that's not the case" as a way of reframing away from the conversation of whether things are getting better, or worse, and why that is. Basically interfering with the effort to understand the policies that help or hurt by simply asserting that everything's bad, so nothing being talked about can possibly be a good thing.
Saying "well I'm not doing okay, how dare you say I'm not struggling" and getting all fucked up and angry about it, so that anyone that tells you that millions of low-income workers are making more now than they were a few years ago, like way more, and that's a good thing, looks like an asshole
Bringing up that the CPI excludes some categories, and implying that if it did include them, it would show more inflation than what it does (including the pretty significant spike in 2022). This one is actually a really clever subterfuge, because of how complicated it gets to explain why it is wrong (whereas if you just say "CPI doesn't include housing costs" or whatever, people can grasp that instantly and make the connection and assume that housing costs would change the value if they were included).
Saying "well who cares about the stock market, I just know I'm struggling" when no one said anything about the stock market or the rich-person economy metrics, and everyone's talking about inflation-adjusted wages and nothing about the stock market
They're all tricks. There are more but those are some of the main ones
And you see the same 4 or 5 of them, over and over again, if you start looking
You'll see some of them in comments nearby to this one, I guarantee it
Edit: More
Insisting that when cumulative inflation is 20%, and 10th percentile wages have gone up 32%, wages aren't keeping up with inflation, simply because you insist that they aren't. If anyone tries to say numbers, just say they don't count.
Focus on the 20% inflation, because it feels real. People can see it in grocery prices, it's tangible. It rings true. The wage growth is mostly at the low end (truck drivers, housekeepers, manufacturing) where most Lemmy users can't see it, and even when someone's wage has gone up, it's easy to decide it happened because of some other factor, whereas $7 for a carton of eggs is right there in your face and memorable. And universal.
What are these "tricks" for? Millions of us out here are struggling. "But you're earning more money!"... Ok, a dollar more? While everything else has gone up including rent with a near 40% increase in the last few years in some places.
To just be so dismissive of those barely surviving sounds like you're coming from a place of privilege.
Insisting that when cumulative inflation is 20%, and 10th percentile wages have gone up 32%, wages aren't keeping up with inflation, simply because you insist that they aren't. If anyone tries to say numbers, just say they don't count.
Focus on the 20% inflation, because it feels real. People can see it in grocery prices, it's tangible. It rings true. The wage growth is mostly at the low end (truck drivers, housekeepers, manufacturing) where most Lemmy users can't see it, and even when someone's wage has gone up, it's easy to decide it happened because of some other factor, whereas $7 for a carton of eggs is right there in your face and memorable. And universal.
This is also a little bit of the getting angry or fucked up tactic, too. See? I look like an asshole now, with all my numbers.
Just making up a number of 40% inflation I haven't seen before. I don't think that's common enough to warrant an entry of its own. Want to show me where you got 40% from?
Got it. So, back in November of 2021, someone wrote a story with a clickbaity headline about 40% rent increase in the future from back then, and now to you that's reality you are citing to me. Great stuff.
Anyway, here's the actual numbers. The median rent went from $1,102 to $1,340 in those 3 years - 21.5% cumulatively. That's what happened. So someone who's low income who's making 32% more comes out ahead. Does that mean that can afford their rent, when it's $1,700 because they're in a metro area and they make $16/hr? Fuckin A, man, maybe not. I'm being an asshole to you in this conversation a little bit, just because I know that you're deliberately twisting things to make Biden look as bad as possible (as confirmed by you which was what got you temp banned already). But I'm not trying to be unsympathetic to someone who's actually struggling and being honest about how they're struggling.
But maybe we should keep doing more of the stuff that gave them the 32% increase, and in a few years they'll be able to afford the $1,700 or whatever it is by then. Right? Or not? What would your solution be, instead, if not that?
I think you're out of touch on the dire situation Mozz. You can throw statistics and numbers around but for millions of the working class, they've never struggled as much as they are currently.
Eight of the top 10 metro areas are in the Sun Belt region. Rents in each of these metros have increased over 37% since 2019.
I don’t want to play the debunking game all night. I read your link, and here’s their rent increases:
Rent in the area went from $582 to $907, or a 55.8% increase.
Rent for 1-bedroom apartments increased 49.5% from $646 to $966 from 2019 to 2024.
And so on. It looks like they sorted every metro area in the US by percentage increase, which yields a whole bunch of individual metro areas with oddball markets where some super-cheap pandemic pricing ended and so the percent increase in places where it had been $582 for a 1 bedroom apartment during the pandemic, was pretty high. That doesn’t mean the price of housing in general went up by that same high percent.
Like I say, someone who’s actually struggling, I have sympathy for. You, I don’t, because you’re just out here lying with statistics to try to hurt the people you are claiming to have all this sympathy with.
Replying to "the economy is getting better" with "how DARE you say the economy is good and all the problems are fixed, clearly that's not the case" as a way of reframing away from the conversation of whether things are getting better, or worse, and why that is. Basically interfering with the effort to understand the policies that help or hurt by simply asserting that everything's bad, so nothing being talked about can possibly be a good thing.
Let’s see if we can get through literally all of the bullet points if you want to keep the conversation going long enough; we have 3 so far I think
It’ll be an easy way to get your hours in at least
Saying "well I'm not doing okay, how dare you say I'm not struggling" and getting all fucked up and angry about it, so that anyone that tells you that millions of low-income workers are making more now than they were a few years ago, like way more, and that's a good thing, looks like an asshole
You're up to 4 out of 6 but I don't feel like playing anymore. Some other time
Like I say, someone struggling, I have sympathy for. Someone lying, to try to misrepresent the economy with the ultimate goal of encouraging the election of someone who will hurt those struggling Americans in ways that will make the current struggle life look like sunshine and roses, I don't have sympathy with. Don't try to pretend you are one when you're the other.
millions of low-income workers are making more now than they were a few years ago, like way more
Please do go ask them about their house they just bought with all this "way more" money and how now they're no longer living paycheck to paycheck. /s
Did I mention the election at all here? You realize the economy can be "doing great" (for corporations, the stock market, etc) and millions of people can still be struggling right?
What do you think about inflation? I don't think it's really that high, to be honest. I looked at the numbers on the Federal Reserve page, and they seem pretty reasonable to me except for the spike in 2022. What do you think about it, though?
What do you want me to say about it? "I love inflation"? It doesn't matter what you call it to a family of four putting items back at the grocery store they can't afford.
It looks like they sorted every metro area in the US by percentage increase, which yields a whole bunch of individual metro areas with oddball markets
This is the entire reason why people critique nationalized metrics on economic trends: they intentionally disregard figures that fall outside the norm so that they can apply a fed policy for the entire country, favoring the overall economic performance instead of addressing the localized economic shortfalls. It's like a doctor trying to diagnose constipation by reading someone's vitals; none of the experience of the patient can be seen on the metrics they're using until it's literally killing them. "You say you haven't shit for 8 days but your BP is 120/80 so you must be fine".
Like, sometimes those metrics overlook really important possibilities, like unemployment not accounting for people who need multiple jobs, or total job market numbers not accounting for ghost positions and high turnover. CPI is used for setting fed interest rates, and it tosses out specific categories because the prices move too fast to gauge the effect of interest rates on those prices. They're not trying to measure how well people are surviving, they're measuring how economic output is adjusting to the supply of cash. That's why they have CPI-U, it adds those categories back in so that they get a better picture of how people are experiencing the market. Notice, though, that even real wages doesn't have any way of reflecting anything about where those wages come from; whether people are taking on extra jobs or if their work hours are increasing without extra pay, or if a transient spike in COL depleted your savings and you're right on the edge of instability. Those numbers tell an extremely narrow story about the state of the economy, and if there are a bunch of people who are telling you 'this number isn't reflective of my experience' then maybe you need to take a more granular approach to the data.
It's exhausting watching this from the left, because depending on who is in office the chosen metrics for assessing the economy change. For 2016-2020 the metric was stock indexes and GDP, for 2020-present it seems to be CPI and unemployment. Neither party likes talking about high-interest credit, or job security, or retirement savings, or healthcare costs or realestate affordability, and that's infuriating. There are a growing number of ways people fall through the cracks of economic instability and the averages are designed to throw those out as exceptions. You lose your job and fall into drug addiction? Sorry, that's not the 'average' American. You get into a car accident and can't pay your medical bills? Sorry about that but that's not relevant to the bigger picture. All we can see is 'you should feel good/bad about the economy for these abstracted reasons', and then you get partisan fanboys yelling at you that you're wrong if your experience doesn't align with that national picture. It's even more frustrating when the same people are are telling you things are great are simultaneously acknowledging that things should be a lot better.
'You're just trying to make people feel bad about the state of things' - jesus can you just fuck off with that constant condescension? People feel shit about the economy because things are shit for a lot of people. More than a quarter of the country has less than $1000 in savings, maybe people are scared they're a single accident away from homelessness and your national metrics simply don't show that. My parents are talking about EOL plans and I'm realizing I don't make enough to support them. How does CPI account for that? It fucking doesn't.
"Things are relatively better through this narrow view of the world" - well why the fuck should I care if i'm not in that picture?
I wasn’t real explicit about it, but my point was more that the results he cited were coming from places where the “before” picture was rent of $600/mo during the pandemic, and so it’s not reasonable to say it went up by 57% after that, and so that’s the rate of housing inflation.
For 2016-2020 the metric was stock indexes and GDP, for 2020-present it seems to be CPI and unemployment
I’ll take wages at different percentiles, and average wages, as a pretty good metric. Your criticisms of the other metrics I’ll agree with. In particular, unemployment gets a ton of play for how shitty a metric it is overall if you really look at how it’s calculated.
Your implication that if they only were looking at the other metrics (in particular hours worked as an explanation for why rising wages may not mean anything)… I mean, it makes sense, but do you know that that’s actually happening? As opposed to, if it were happening then it’d paint a different picture?
There are a growing number of ways people fall through the cracks of economic instability and the averages are designed to throw those out as exceptions.
I partly agree and partly don’t. So, the fed actually does keep track of a survey that tries to get at this stuff -I think this is it. Like, okay forget the metrics, what’s the average financial reality look like for the average American. It’s actually pretty fascinating reading, both because it agrees with you in parts (shows places where the metrics aren’t showing the full picture), and because it’s a way of getting at that idea without abandoning the idea of being rigorous.
But also, you can’t set economic policy because “hey my brother’s out of work and he’s struggling, isn’t that important? Don’t tell me things are good.” You have to try to get at the broad scale of what’s going on. Like am I supposed to not care about a million truck drivers, and stop doing the stuff that got them another $6/hr? The point is let’s pick the right metrics and try to help the most people, not just say my brother’s doing bad so let’s not use metrics anymore.
So what are you saying we should do instead? If anything I’m saying sounds like “let’s not give them another $20/hr instead”, that is not at all what I am saying.
Idk ma, I feel like I’m just rehashing all my bullet points again. Me saying, wages went up and that’s good, is meaning to be yelling at and disagreeing with the people who say NO THEY WENT WAY DOWN AND THE GUY WHO MADE IT HAPPEN IS EVIL. It’s not at all meaning, they’re high enough or things are good for working people.
Being rigorous isn’t always meaning the metrics are wrong or you don’t care about the individual behind the aggregate. Saying you don’t want to be rigorous and focus on anecdotes instead, is usually a sign of something pretty dishonest though. That isn’t helping anyone who’s struggling, it is in service of something that is hurting them.
The broader problem with adhering to those metrics as a gauge for economic output is that it assumes things across the board move up or down together within a reasonable margin, when you and I both know that certain groups fair way better than the average, a big portion of economic growth not even reflected in wages at all, and some are falling off the bottom of the graph entirely. Taking an average wage doesn't tell you anything about the long-term stability of individuals. A greater and greater number of people are having to rent because they're being priced out of home ownership, and even if that isn't reflected in rent prices now it still means that asset-backed capital is being held by a smaller and smaller number of people. That doesn't mean much to CPI but it means everything to upward mobility and generational wealth transfer.
I'm not even trying to paint a bleak picture in service of saying it's all Biden's fault, it's been the default economic schema for decades. I'm saying its disingenuous to point to those metrics when you know they aren't the ones that of the most concern to individuals who see no future for themselves and their families. It's not all Biden's fault, but he's currently the one enacting those policies that have slowly degraded economic mobility for 80 years. "But you're wages are marginally higher!" doesn't mean much when the cost of home ownership has been outpacing median income since the 1970s..
Things being marginally better for the average American under Biden doesn't mean anything when the average American has been almost completely left behind over the course of 50+ years.
It's not all Biden's fault, but he's currently the one enacting those policies that have slowly degraded economic mobility for 80 years.
This is where it breaks down for me. All the rest of it, I pretty much agree with completely. But Biden's been busting his ass to strengthen unions, bring domestic manufacturing back, and make corporations pay their fair share. He routed like a trillion dollars from corporations to working people, and it had a little tiny bump of an effect, and it may be a few drops in the bucket but it's still a good thing. They're making about 35% more (un inflation adjusted) than they were before. If we weren't still digging out from Covid inflation it would have been an economic revolution, but even as it is, they're comfortably clearing over the 20% inflation and getting a tiny bit more breathing room.
If you want to extrapolate from that statement to "but rent is a huge missing piece of that, with specific things he should be doing to address that, too" then sure. I'd 100% agree with you. But, on the other hand, if you want to extrapolate to "and so none of that union stuff happened and he's still a piece of shit just like all the generations of politicians that created the gilded age nightmare we've been drowning in ever since 2008/1995/1980/whenever", then I'll disagree with you.
Maybe you aren't saying that second thing, and I'm angling a certain amount of heat at you because there are other people who are, and it's easy to become tribal about this type of disagreement. But, that's how I feel about it.
strengthen unions, bring domestic manufacturing back, and make corporations pay their fair share.
That's what I mean though, those things aren't the problem. They fit within that neoliberal economic picture really well but it doesn't address the declining state of middle class' economic stability. We've been operating under the assumption that when our productive output is high, everyone benefits (which is why bringing manufacturing stateside is valuable), but over the last couple decades those jobs have had a steep decline in quality (it used to be that a manufacturing job could support a family of 5, but that's just not the case anymore) due to automation and the relative productivity of capital against the productivity of an individual worker. We'd have to continue consuming well beyond a sustainable level in order to produce enough manufacturing jobs for everyone, and those jobs just aren't as good as they used to be. Even union protections are ultimately just a finger in the dam, when fewer and fewer jobs are needed for higher and higher output. And none of that picture addresses home ownership and generational wealth transfer.
Things are as good as they can be without fundamentally challenging the neoliberal economic hegemony, but that's exactly the problem with the picture. Those metrics suit that way of thinking but they simply don't address the reasons why the American public is struggling.
I'm just so sick of seeing these accomplishments paraded around as if they address the problems normal people are actually facing. You're going to be chanting "things are really great actually!" as we all get chased out of the country by a nationalist movement driven by economic disenfranchisement. We can't keep doing this.
Right, I know. This is a fundamental disagreement in how we see "the right economy" and the right type of structure for a country.
Honestly, I don't even really have a problem with what you're saying here. I think the answer to the problem you're describing is strong unions to be able to claw back the fruits of all those gains in productivity for the working class, pretty much by force, and then a democratic-enough government in place that it won't squash or undo that whole effort on behalf of capital. That's very different from anything we currently have.
I think that the US economy as it existed for white people between about 1940-1970 was a very clear example of how things can work well, and if we could deploy that, extended to all races instead of just the whites, and replacing oppression of the third world on a massive scale with technological improvements, I think that would be good.
One thing incredibly notable to me about that FDR economy that I like, is that it didn't come from some political class coming down from above and saying "here you go we fixed it" -- it only was able to happen because people banded together into unions and fought multiple generations' worth of literal bloody battle to demand the type of economy they deserved, and then after the fact the politicians took credit for having "given" it all to them. But whatever.
I don't really expect you to agree with me on that, but I don't have the type of intense disagreement with you if you're saying that Biden isn't putting us on track for real communism which is what's required. My real intense disagreements are reserved for other people who are pretending that Biden is doing a Clinton-style neoliberal betrayal of even my preferred within-the-capitalistic-model progress, and so even people who want that FDR economy should vote against him.
I could get on board with some militant union organizing and class solidarity. But that's about as likely to be successful under our current government as a class revolution: police are armed to the gills and even a union-friendly administration isn't going to tolerate the kind of union action that we'd need to make a noticeable dent in our economic organization. Even a pretty light rail strike was quickly intervened on (I'm aware of the concessions won with the administrations assistance after the fact, you don't need to elaborate on it for me). The reason why that example isn't a good sign is that the kind of damage a strike like that threatens is kind of fundamental to all potential strikes in the future... That a union strike like that with real leverage couldn't even be tolerated for a moment is.... well it's not encouraging. Can you imagine something like an energy strike, or a roadworker strike in the form and style of the Pullman or Homestead Steel? An entire city's industry shut down by armed union workers? God forbid a general strike...
Idk. And I also really doubt that a new-deal economy would work today... Capital just isn't as reliant on labor as it used to be. It's my ardent belief that we're already way overproducing 'goods' (I like the marxist term 'treats' to describe most of what we produce now); how would unions help reverse that kind of overproduction and over-consumption? How do unions dissolve the kind of wealth that's accumulated around old-money industry and redirect it? The free market has distorted the capital landscape so much that the kind of action we need isn't achievable without an external pressure.... Unions work well to redistribute resources between industry and labor but aren't able to pump the breaks or redirect it elsewhere.
I think our economic options are just... really really bleak. And it's happening as we're entering into another cold-war style conflict with China.... Yea. I'm of the opinion that things will get way, way worse before they get noticeably better.
You might be right. It used to be that without people to grow the food, anyone involved with capital would starve. Kind of sets a baseline underneath how small labor's power is ever able to shrink to.
Now automation has gone, not quite, but almost far enough that it's the exact opposite -- capital can simply say "lol okey dokey then, good luck" and stop cutting labor in on any of the products of automated factory farming.
Brings it back to the question, though, of what is the solution then?
I don't feel the economy is getting better but I blame inflation on trump not continuing obama slowly raising interest rates and so when covid hit we were already at zero. Covid actually saved trump from inflation on his watch as we reduce demand for about a year or so amount of resources which managed to shift it to just out of his term.
The US economy and one's personal financial situation are separate situations.
The economy is doing great, high dollar value, low unemployment, new job creation, small business subsidies, government investment, it's all greatly strengthening the dollar.
That's the strong economy.
Regulatory economic practices and corporate lobbying against fair pay and price limits on housing and living essentials has been increasing for the majority of Americans for decades.
No unions, no labor rights. No regulatory oversight, no mortgage caps.
The economy is doing great and it has nothing to do with grocery prices or something like gasoline which is largely imported and based on the whims of a single family thousands of miles away that wakes up and decides what the price will be.
When people rate the economy they are looking at their personal situation. The article is complaining that people aren't looking at all these economic indicators, but it's not clear why they would care about them if they personally are facing hardship.
They shouldn't care about the economic indicators but they should care about their own interests.
Conflating the economy with your personal finances is like conflating the number of trees in your country with the state of repair of your house.
The government could invest in planting new trees and agricultural maintenance, but that has nothing to do with how your wooden house was built.
Similarly, the economy, the ecosystem of finance, can be very strong without affecting your personal financial situation, since the two are unrelated.
How many trees are planted and how healthy the trees are doesn't have much to do with the carpenter who used cheap wood or poor insulation when building your house.
This misunderstanding is an example of false equivalence: The economy means money, My finances means money, so the economy means my finances.
Since the US economy is completely separate from control over your personal finances (except for the stimulus checks), the health of the economy has nothing to do with how much your bosses choose to pay you or the benefits you are given.
That's determined by the corporation employing you and the regulations they follow.
Those circumstances can be changed by laborers joining a union, the national labor relations board, the ACLU, grocery regulations, by good in responsible social decisions in general.
When people write about "the economy", including the person who wrote this article, they generally focus on just two things:
Inflation
Unemployment.
Those are the two things mentioned in the subtitle of the article. It's no coincidence that those are also the two priorities of the Fed. And those are also the two macroeconomic indicators that are most likely to affect American personal finances. The first one relates directly to gas and grocery prices, BTW.
So there is good reason to be glad when the economy is doing great.
The US economy and one's personal financial situation are separate situations.
I think the point no one is outright saying is that yes, you're correct. However, that shouldn't be the case.
Many Americans find it appalling that we measure the economy by stock prices which don't reflect the economic situation that is experienced by the vast majority of Americans. They believe that we should measure the economy based on things like housing and food affordability, with less emphasis on the economic situation of the wealthy few who don't need to worry about those day to day concerns.
I wouldn't change the definition of economy simply because the term is misunderstood or pigeonholed.
With "the economy" being an accurate term for a complete financial system, we should use accurate terms like affordability or livability to describe livability and affordability problems rather than a vague, tangential unrelated term.
The economy is very strong, affordability is at a low.
National forests are very healthy, my house has termites.
The abstract number of trees is irrelevant to the termites in a house.
It is nice that the US economy is strong, it is not nice that US affordability is so weak.
It is nice that this restaurant has so many windows, it is not nice that my chicken was overcooked.
Economic signs are improving, but many Americans don't feel the relief.
Inflation showed signs of cooling and both stock indexes and corporate profits are up. But many Americans aren't feeling any economic relief.
Despite a low unemployment rate and slowing inflation, many Americans believe the economy isn't doing well because food and gas prices are still high.
Well, the government isn't gonna induce deflation. Wages may rise, and a low unemployment rate contributes to that, so the price may fall relative to your purchasing power, but in absolute terms, the prices are where they are.
"The real wages are increasing much faster than the inflation rate, which is very steady," said Kishore Kulkarni, an economist with Metropolitan State University in Denver. "And therefore, the real wages are in fact increasing, but people are not feeling it because there is so much negativism outside."
I don't know what they're using, but the CPI -- what most people use when referring to "inflation" -- incorporates food, and food inflation over the past year is lower than any other component. So they're not gonna wind up with a lower rate of inflation by excluding food.
12 months is a poor timeframe to use for inflation when the most relevant data to consumers today is 2021-2022, and again fuel is required to function in the US which I don’t see in CPI making it a poor indicator for real finances. Really though my point is metrics can be manipulated to sound good or bad but ignoring consumer sentiment is foolish for a politician seeking to be elected by those consumers.
By that logic we should only read last months data and forget the rest of history, but in reality people have memories and incorporate previous experience in their sentiment.
Those two numbers you are asking about ("true rate" or the abstraction), for the recent past, pretty much work out to the same value.
The CPI excludes some volatile categories, but it's not a trick, in this case.
The tactic of bringing up that the CPI excludes some categories, and implying that if it did include them, it would show more inflation than what it does (including the pretty significant spike in 2022)... that actually is a trick, actually a pretty subtle and clever one. To make people think the economy is getting worse, when it's getting better.
Edit: I made a top level comment with the guidebook to some of the other tricks
I didn’t actually know that, thank you. Yeah, I know there is some commonly cited “inflation” number that excludes some volatile categories but over the last couple years that actually doesn’t change the bottom line - but yeah, it makes sense that CPI would include all the common consumer goods regardless of volatility.
Honestly I have to admit I’ve become a little bit jaded with hundreds of times looking some particular claim up and learning about things and finding that someone who was swearing some particular thing, was lying; and I’ve gotten lazy about it as a result
It’s almost as if all the “Biden ruined the economy” trolls are consistently not being 100% truthful and straightforward about things
So I spent some time looking into this wage increase stuff and I did find this fun chart with inflation adjusted wages growing 2% in the last 5 years, that’s pretty paltry compared to the corporate profit increases. I’d bet that power imbalance is a large factor in consumer sentiment falling against otherwise good looking economic data.
We’re in a weird economic time right now where the median is actually misleading.
Wages at the bottom are going up hugely (beating inflation by 12 percentage points). Wages at the middle (median) are pretty much unchanged as you noted. Wages at the top are falling behind inflation. I.e. inequality is going down for the first time in God knows how long.
I talk about it elsewhere in the thread and link to a couple articles, but the short answer is that you’re not wrong but median real wages aren’t the whole picture right now.
And yes corporate profits are a huge problem. There was a huge corporate tax increase in 2023 that funded some of the stuff the led to the 12% wage increase at the bottom end, but it’s nowhere near enough.
