This is a Good Sign For Small Businesses
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Finally, someone who has some empathy for small businesses/ labor.
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Big day for neoliberals everywhere
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@forsweden Yup. I do hope that she and Powell do learn some things from some of the Trump policies that did help wage growth without increasing inflation (which by the way needs to reformulated to the modern economy).
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Yeah, I love the CPI style of measuring inflation, which seems to ignore small expenses like housing, medical care, education, etc.
I suspect if minimum wage was adjusted for real cost of living factors since 1970, it would easily be over $15 now. The "economy" has been ill since trickle down, it will take a miracle worker to correct some of these issues.
And there needs to be a stimulus aimed at actual people, and on par relative to GDP with packages from other rich nations. Of course, brave warrior for truth and justice Mitch and friends will do what they can to keep things relative to their own not exactly first world states.
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@fintail said in This is a Good Sign For Small Businesses:
Yeah, I love the CPI style of measuring inflation, which seems to ignore small expenses like housing, medical care, education, etc.
That's not true. The CPI absolutely does include the cost of housing, medical care and education.
https://www.bls.gov/cpi/questions-and-answers.htm#Question_10And here is a detailed document of how CPI is calculated in the USA
https://www.bls.gov/opub/hom/pdf/cpihom.pdfIt sounds to me like you, like many people, confuse CPI and inflation rates with their own personal cost change experience.
CPI is merely the weighted measure of a basket of items. And inflation is just the measure of the change in the CPI from year to year.
A person's indiviual experience is very likely to differ from the official inflation rate because an individual doesn't buy every single thing that is in the CPI in equal amounts on an annual basis.
For example, if inflation goes up because the cost of housing skyrockets, if you already own your house, you're not gonna care since you already made your purchase. But it will be a big deal for someone looking to buy a house.
Or if inflation goes up because the cost of gasoline goes through the roof... that will greatly affect someone who drives a lot.... especially if it's a large SUV. But for someone who doesn't own a car because they don't need one, it will have very little impact.
Here is a more detail explaination of why your personal experience is likely to differ from what you see in official inflation rates.
https://www.bls.gov/cpi/factsheets/averages-and-individual-experiences-differ.htm2008 Honda Fit
A Known Dad, prone to Dad Jokes
Full of Meaty Goodness -
@manwich Point taken, but...notice I said "seems". One can easily argue their methodology (weighting) does not accurately reflect reality for a large segment of the population.
I like the "don't always match" line at the last link. I wonder if there's any person for whom the entire basket appears accurate, or the rates claimed for when the luckiest generation was getting started actually compares to with what people are facing today.
Perhaps CPI shouldn't be used as a realistic inflation indicator at all.
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@fintail
CPI is just a measure that's used as a basis for comparison.Kind of like how you have the EPA fuel economy or BEV range test.
It's possible to replicate it for yourself if you reproduce the same circumstances that the test is done under.
But just because it doesn't match an individual's circumstances doesn't mean it doesn't have value as a measuring tool for comparing things.
2008 Honda Fit
A Known Dad, prone to Dad Jokes
Full of Meaty Goodness -
@manwich Can or do those hypothetical circumstances exist? It could be useful measuring data points that are consistent for a large population with similar geographic or demographic traits.
Unfortunately, I suspect it is sometimes used to further the wage suppression ideal in Murka (even using the CPI, which in my opinion greatly underestimates the increases in some cost of living factors, minimum wage would be ~20% higher now than in 1970 if the wage then was tied to their simple rate).
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@manwich You are correct in that personal consumption will depend on how CPI will have an impact on one's life. Example, my family is vegetarian and the price of meat doesn't impact us. Howeve, like @fintail said, because wages have been stagnant, the small increases of CPI increases cause larger impacts to low wage workers who have other expenses that are not calculated by CPI. Below is something from Marketplace that talks about CPI.
"I give into my disease, of my needs"
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@krustywantout said in This is a Good Sign For Small Businesses:
the small increases of CPI increases cause larger impacts to low wage workers who have other expenses that are not calculated by CPI.
I'm not disputing that one bit. I've seen first hand how some some people are disproportionately affected by price changes and how some aren't.
For figuring out the actual impact price increases have on the average budget, other measures are more suitable than CPI... like a "cost of living index"
https://www.numbeo.com/cost-of-living/rankings_by_country.jsp -
@krustywantout I'm really most curious about the weighting methodology, and if there are actually people who the numbers relate to. It seems everywhere (where people want to live anyway), factors like housing, healthcare, education, transport, etc have wildly outpaced the CPI, while wages largely haven't, and not just at the lower end of the scale. Without two income families, the game would collapse, I suppose. Sure, I can buy a TV much cheaper today, but the house or rent has increased insanely, and I make many more house payments than buying TVs.
