Replies to post #460730 on Tornado Alley (PROG)

[fuagf]

conix, Yeah it's a real shame wage inflation is killing your stock exchanges performances now. And Biden's unemployment rates! Australia is really suffering too!!

"Bottom line, bub, the US will never see the wage inflation go back to wage rates from three years ago--
meaning higher prices for most things are forever. Thank you, Joe, for that "Inflation Reduction Act".
Even you, blackhawks, knows that that Act is NOT reducing Inflation."

Do you really get paid to parrot Australian conservative's talking points, even so far away as the U.S.A.

Macroeconomics - Minimum wages and inflation

April 27, 2023 by Greg Jericho and Jim Stanford

Authors Greg Jericho Chief Economist
Jim Stanford Director, Centre for Future Work

New research from the Centre for Future Work at the Australia Institute has revealed how rises in the minimum wage have almost no impact on inflation and given the collapse in the value of the minimum wage in real terms over the past 2 years, a 7% increase is a necessary recompense for Australia’s lowest paid workers.

Each year the Fair Work Commission conducts the Annual Wage Review (AWR) which determines the national minimum and award wages. And each year it is met with a chorus of cries from business groups, conservative politicians and commentators that Australia’s economy will surely break should the minimum wage be raised too much.

Over the past two years however, the minimum wage has risen by less than inflation, causing a significant decline in the real purchasing power of millions of workers covered by the Modern Award system. This marks the first time in a quarter-century that the minimum wage has had a deflationary impact on the economy (that is, increased by less than the inflation rate) over successive years.

Despite this fall, once again, submissions from business groups to this year’s AWR have called for rises below inflation, and have cited concerns about a wage-price spiral as justification for advocating a further erosion of low-paid worker’s living standards.

But research by Greg Jericho and Jim Stanford shows that minimum wage increases over the past 25 years have had little to no impact on inflation at all. It also demonstrates that a 1% increase in the minimum wage and all Modern Award wages – even if completely passed through into higher prices – would result in a virtually undetectable 0.06% increase in economy-wide prices. So small is this that a mere 0.2% fall in profits would be enough to cancel any impact on prices at all.

The research reveals that the call from the Australian Council of Trade Unions for a 7% increase in the national minimum wage would make up a portion (but not all) of the real wage losses, workers have experienced in the past two years. Even if fully passed on in higher prices, with no reduction in current record-high business profits, a 7% minimum wage hike would at most translate into an increase of just 0.4% in economy-wide prices.

Alternatively, that 0.4% rise could be offset by just a 1.4% reduction in total corporate profits.

With inflation passing its peak, there is no cause for concern that a minimum wage rise of 7% (equal to the annual rate to the March quarter) would add fuel to the inflation fire.

This reinforces recent research by the Centre for Future Work .. https://futurework.org.au/report/profits-and-inflation-in-mining-and-non-mining-sectors/ .. that profit margins are presently at record highs in Australia, because companies have increased prices since the pandemic far more than their own input costs. This gives companies ample cushion to absorb the cost of higher minimum wages, with no impact on prices at all.

In sum, the impact of minimum wage increases on average prices is thus little more than a rounding error. But for the 20% of employees who earn either the national minimum wage or wages set under Modern Awards, a strong minimum wage increase will be vital. It will ensure that the lowest paid, who have already been most hurt by inflation, are not forced to suffer more due to an inflationary upsurge that was ultimately spurred by higher profits, not wages.

Full report

https://futurework.org.au/report/minimum-wages-and-inflation/

--

As of 1st July 2023, the minimum wage is $23.23 per hour, or $882.80 per 38-hour week. This is a 8.6% increase
of the national minimum wage. This increase applies from the first full pay period starting on or after July 1 2023.
https://squareup.com/au/en/the-bottom-line/managing-your-finances/minimum-wage-australia

[blackhawks]

Bottom line, bonehead, you start with the premise that Biden can do nothing right and it follows that the Inflation Reduction Act didn't work; with no evidence to back that claim up. The Fed interest rate policy is the biggest factor in the reduction in inflation

Can't understate the importance of Biden not jawboning the Fed to be less aggressive with interest rate hikes. No question that Trump would have shown no such restraint. 'The Fed is being very unfair to me', is most likely how it would have gone.

https://www.americanprogressaction.org/article/a-year-of-impact-the-anniversary-of-the-inflation-reduction-act/

Lowering costs
With nearly half of Americans reporting concerns about living expenses, the Inflation Reduction Act took a critical step forward in reducing costs for everyday Americans. From reduced prescription drug prices to lower energy costs, hear from the Americans who have experienced savings thanks to the Inflation Reduction Act.

Exactly none of that would have happened under Trump.


From 6 months ago. No metric as grown worse for the U.S. since then. Biden's IRA did NOT extend to the other G7 countries.

https://www.americanprogress.org/article/7-reasons-the-u-s-economy-is-among-the-strongest-in-the-g7/

JUL 25, 2023
7 Reasons the U.S. Economy Is Among the Strongest in the G7

Cooling inflation, continued economic growth, and a strong labor market exemplify the sustained resilience of the U.S. economy, particularly compared with other advanced economies.

The United States has the lowest inflation rate in the G7
As the world emerged from the heights of the COVID-19 pandemic, most advanced economies experienced elevated inflation. U.S. inflation remains above the Federal Reserve’s 2 percent target but is down substantially from its 2022 highs, with annual inflation declining in each of the past 12 months.

Compared with advanced European economies, the United States has the lowest harmonized headline inflation rate—a comparable measure of inflation. (see Figure 1) In fact, compared with every other G7 economy, the United States has not just the lowest headline inflation but also the lowest core inflation—inflation that excludes volatile energy and food prices. Core inflation is the preferred measure of central banks.

[longrider51]

Actually, the IRA factually already has you numb nut-less freak...

[arizona1]

Bottom line, bub, the US will never see the wage inflation go back to wage rates from three years ago--meaning higher prices for most things are forever.

Too bad you never learned how to make money or you wouldn't be bitching about paying $1 more for eggs. The rest of the country is thriving.

[sortagreen]

that Act is NOT reducing Inflation

Yes, it is. At least you can definitively say that inflation is down to 3.4% the last time I checked. Perhaps you don't understand the meaning of the word. Do you mean we aren't seeing deflation? Do you have some clue as to what that would do to the economy? Yeah... probably not. There's nothing wrong with having an opinion if you have some knowledge of the subject. You don't appear to. You aren't bright; just a bag of obnoxious hate.



I'd love your take on how Joe Biden was responsible for world-wide economic disruption followed by world-wide inflation.

As far as the inflation reduction act, that's hard to say. Something brought inflation down from 9.1% to 3.4%. My take on it is it was mostly the Fed. That's their job, and they should have acted sooner. But the improving wage situation, the enormous investment in infrastructure and tech facilities, the rock solid GDP when everyone predicted recession? That's Biden. And you would know it, if you weren't so fucking dumb and mean.

Former Trump adviser on Biden’s economy: ‘I would be bragging about it, too’
by Sarah Fortinsky - 01/25/24 5:41 PM ET

Fox Business host Larry Kudlow, who served as director of the National Economic Council (NEC) during the Trump administration, said President Biden is justified in touting the economy’s strong numbers, saying, “I would be bragging about it, too.”

“I’m an honest broker. He got a good 3.3 percent [gross domestic product] number for the fourth quarter, following a good 4.9 percent in the third quarter, OK. If I were he, I would be bragging about it, too. And inflation has come down,” Kudlow said on his Fox Business Network show Thursday.

“All’s fair in love, war and politics. Brag when you can. I get it. I’ve been there,” he continued.

https://thehill.com/business/4430167-kudlow-trump-adviser-biden-economy/

Kudlow then goes on to defend the tired-assed trickle down theory that's failed us for the last 40 years.

Kudlow, however, then took aim at Biden’s “completely wrong” message Thursday in Wisconsin, playing a clip in which Biden said: “My predecessor, though, he chose a different course. Trickle-down economics, cut taxes for the very wealthy and big corporations, increasing the deficit significantly. That’s exactly what happened. He stripped good paying jobs and ship them overseas.”

“He just can’t help himself,” Kudlow said of Biden, before defending the tax cuts under Trump.

Can't help himself? Yeah... Back at ya, Larry. When you leave office and inflation takes off like a runaway horse, blaming your successor is pretty rich. 🤨

*********************************************
The Infrastructure Investment and Jobs Act (IIJA), most commonly known as the Bipartisan Infrastructure Law (BIL), (H.R. 3684), was signed into law by President Joe Biden on November 15, 2021
https://en.wikipedia.org/wiki/Infrastructure_Investment_and_Jobs_Act

The CHIPS and Science Act is a U.S. was signed into law by President Joe Biden on August 9, 2022.
https://en.wikipedia.org/wiki/CHIPS_and_Science_Act

The Inflation Reduction Act of 2022 (signed into law by President Joe Biden on August 16, 2022) is a landmark United States federal law which aims to curb inflation by possibly reducing the federal government budget deficit, lowering prescription drug prices, and investing into domestic energy production while promoting clean energy.
https://en.wikipedia.org/wiki/Inflation_Reduction_Act

Given those timelines, none of those signature pieces of legislation came into play until 2022 or 2023 and inflation is down significantly (63% or so by my math)