Inflation is always a distribution issue. If all the prices and wages went up at the same rate, the only thing being eroded is stockpiled wealth, and this would make the rich less rich. But that’s not how inflation works in a price shock like this.
The article says prices rose 3.8% and wages 3.6%. If that doesn’t sound like much difference it’s because it isn’t. The real issue is that the prices of gas and food have risen far more than other goods (and will continue to do so, probably). People with lower incomes spend a much bigger fraction of their income on those consumer goods.
Also, those 3.6% wage growth aren’t universal. The very lowest incomes haven’t all been lifted by that number.
One way to combat this is to raise minimum wage and strengthen unions so they can negotiate better wages. Of course, that would increase overall inflation a little more, so the rich don’t want that to happen.
Another way to combat this is to make heavy regulations such that US domestic oil production covers most needs, but the oil companies don’t want to miss out on record prices, and people have been taught that the government should never do things, and to let the market regulate instead.
the “market” and its invisible hands are not a real phenomenon; they are directed by the owning classes and purpose built to keep that “just one more week and it’ll be ok when i get paid” feeling in millions of americans. it is, literally, all made up.
Inflation is always a distribution issue. If all the prices and wages went up at the same rate, the only thing being eroded is stockpiled wealth, and this would make the rich less rich. But that’s not how inflation works in a price shock like this.
The article says prices rose 3.8% and wages 3.6%. If that doesn’t sound like much difference it’s because it isn’t. The real issue is that the prices of gas and food have risen far more than other goods (and will continue to do so, probably). People with lower incomes spend a much bigger fraction of their income on those consumer goods.
Also, those 3.6% wage growth aren’t universal. The very lowest incomes haven’t all been lifted by that number.
One way to combat this is to raise minimum wage and strengthen unions so they can negotiate better wages. Of course, that would increase overall inflation a little more, so the rich don’t want that to happen.
Another way to combat this is to make heavy regulations such that US domestic oil production covers most needs, but the oil companies don’t want to miss out on record prices, and people have been taught that the government should never do things, and to let the market regulate instead.
Welcome to the market.
the “market” and its invisible hands are not a real phenomenon; they are directed by the owning classes and purpose built to keep that “just one more week and it’ll be ok when i get paid” feeling in millions of americans. it is, literally, all made up.