Is Corporate Greed Causing Inflation?

In reply to Hungary Bill (Forum Supporter) :

Property is something they aren't making anymore. Housing is more about location than the house itself. 

My first house was $48k. We lived there for 25 years. Turns out it was in what is now a coveted downtown area. I sold it 10 years ago for $300k. It sold again a couple of years ago for $740k. 

My current house was farther out of town. I paid $170k for it. Guess what, in the last 12 years, town has moved and it is now in a coveted intown area. The current market says it's worth about $350k. 

The other thing that drives housing prices is interest rates. People don't buy based on the house price. They buy based on the monthly payment. Cheap money = expensive house. The high interest rates have driven prices down some but the monthly payment is still the same because interest rates are up.

In reply to pheller :

Yeah, down here in South Carolina with our right to hire/fire laws, we are only paying $25/hr at Volvo or $23-$35/hr at Boeing, or $21-$25 at Bosch, or $20 at Mercedes. 

I'd bet our cost of living is pretty low as well. 

Mustang50 said:

In reply to aircooled :  Good point about our ability to refine petroleum products.  I read somewhere a number of years ago that it more than $3 million just to get the paperwork processed for a new refinery. We have not built any new refineries.  We do have more oil in the ground than all of OPEC. 

Regarding natural gas for cheap and clean electricity production, Ohio, western Pa. and West Virginia is the third largest reserve in the world. We are not using our natural resources wisely.

We've got a glut of natural gas on the market. The product itself is cheap. Honeslty, even using to generate electricity is cheap. 

The problem is not the cost to generate, it's the cost to maintain the infrastructure. 

Compare that against consumer prices:

Trouble is, in places where electricity is cheap, electric cars are expensive. 

Lots of shale workers drive big trucks and complain about gasoline prices, when the products they produce are dirt cheap and could power electric cars for pennies. 

bobzilla said:

In reply to CrustyRedXpress :

There's no cherry picking E36 M3. He makes a wild ass statement. I find the data that shows his wild ass statement is just that. He states that ford workers haven't even kept up with inflation since hte 80's. Data says otherwise. Then he pivots to "well that was because union" and we pull that data. Still wrong. Now, if you want to have a conversation about productivity then fine, but that was not the ORIGINAL statement being thrown out there. 

I didn't really mean to bring Ford into this, and didn't introduce it to the conversation. I only referred to Toyman's example of Ford's executive pay. When I was talking about worker pay I was referring to all workers, not just Ford's.

More people, same amount of stuff.  More demand, same supply.  Prices go up.

In reply to Pete. (l33t FS) :

There isn't the same amount of stuff or same supply, we're not competing for a static amount of manna falling from heaven. Supply for most things has increased and is easily capable of increasing further. Economies of scale make them cheaper...and possible to produce with less labor.

In reply to Hungary Bill (Forum Supporter) :

My beef with my wages today isn't their "adjusted for inflation rate", it's I have less buying power than I would have had at the same job in the 1970's.  And while I can't say it's the same everywhere, I can compare my current position to my grandfathers:
 

There are a lot of problems with these "good ol' days" comparisons. They almost always center on the cost of housing, and almost always compare apples and oranges. No, the same house in the same location in 1975 is not comparable to 2024, as the location has likely changed dramatically. It's not that the wood holding the house together is more valuable, it's mostly the location that is more valuable. But let's give you the housing. How about everything else? Who would honestly trade the 2024 standard of living with 1975? Healthcare, access to entertainment, knowledge, clean air, etc. etc.. People take for granted the things they have in their daily lives that no amount of money could have purchased in 1975. Ironically, one of the big changes has been much greater access to everyone to the wealth building strategies that used to be only accessible to the wealthy. 

Boost_Crazy said:

In reply to Hungary Bill (Forum Supporter) :

My beef with my wages today isn't their "adjusted for inflation rate", it's I have less buying power than I would have had at the same job in the 1970's.  And while I can't say it's the same everywhere, I can compare my current position to my grandfathers:
 

There are a lot of problems with these "good ol' days" comparisons. They almost always center on the cost of housing, and almost always compare apples and oranges. No, the same house in the same location in 1975 is not comparable to 2024, as the location has likely changed dramatically. It's not that the wood holding the house together is more valuable, it's mostly the location that is more valuable. But let's give you the housing. How about everything else? Who would honestly trade the 2024 standard of living with 1975? Healthcare, access to entertainment, knowledge, clean air, etc. etc.. People take for granted the things they have in their daily lives that no amount of money could have purchased in 1975. Ironically, one of the big changes has been much greater access to everyone to the wealth building strategies that used to be only accessible to the wealthy. 

Not to mention technology. Try comparing what you got for your money 30-40 years ago to today in terms of TVs, computers, audio gear, etc. Not to mention the stuff that wasn't even available then, like smartphones. I look at what I used to spend on that stuff in the 80s and 90s, when I made way less money, and just shake my head.

CrustyRedXpress said:

Steve_Jones said:

Just like every time stuff like this is discussed here, those that think the system is against them, or it's someone else's fault they're not where they want to be in life, will continue to make excuses and reasons why they are where they are.  the rest of us will continue on as we do.

You can never convince a "victim" that they have the same opportunity as everyone else.

I am where I want to be in life. I'm very concerned that the playing field is stacked against large portions of our society.  I refuse to "continue on as we do" so long as that's the case.

Many of those that it is "stacked against" manage to seize the opportunity and figure it out somehow.  Are they just lucky?

Tom_Spangler (Forum Supporter) said:

Boost_Crazy said:

In reply to Hungary Bill (Forum Supporter) :

My beef with my wages today isn't their "adjusted for inflation rate", it's I have less buying power than I would have had at the same job in the 1970's.  And while I can't say it's the same everywhere, I can compare my current position to my grandfathers:
 

There are a lot of problems with these "good ol' days" comparisons. They almost always center on the cost of housing, and almost always compare apples and oranges. No, the same house in the same location in 1975 is not comparable to 2024, as the location has likely changed dramatically. It's not that the wood holding the house together is more valuable, it's mostly the location that is more valuable. But let's give you the housing. How about everything else? Who would honestly trade the 2024 standard of living with 1975? Healthcare, access to entertainment, knowledge, clean air, etc. etc.. People take for granted the things they have in their daily lives that no amount of money could have purchased in 1975. Ironically, one of the big changes has been much greater access to everyone to the wealth building strategies that used to be only accessible to the wealthy. 

Not to mention technology. Try comparing what you got for your money 30-40 years ago to today in terms of TVs, computers, audio gear, etc. Not to mention the stuff that wasn't even available then, like smartphones. I look at what I used to spend on that stuff in the 80s and 90s, when I made way less money, and just shake my head.

This is what I call the "hidden value in technology" theory, and it doesn't pan out. The idea is that our technology is so advanced now that there is some hidden economic value in it, like a modern smartphone is secretly worth more than a million Commodore 64s, and therefore it's kind of okay that younger generations can't afford much more than that.

But there is no hidden value. The value was in the R&D that went into designing it and the cost to manufacture it. It's all been accounted for like anything else, so a $100 smartphone is worth exactly $100 in today's money. It's also odd that nobody applied this to TVs or early home computers in the past.

Also, regarding housing, you can't buy a 1975-sized house today for inflation-adjusted 1975 house money. Not even if it's in rural area that's no different than it was in 1975.

In reply to Steve_Jones :

Luck is a significant factor in each of our successes and struggles. The notion that our success or struggle is entirely within our control is just as much a fallacy as the notion that our success or struggle is entirely outside of our control.

The truth is that each success or struggle we face is some combination of luck and choices. Sometimes choices and luck are on the same side, sometimes choices overpower luck, and sometimes luck overpowers choices. Each of which can happen for the better or worse, and can also stack with each other to have a compounding effect.

It's too bad this has never happened before because we'd all be able to learn from the events of the past.

I'm going to go out on a limb and suggest that it's only a temporary situation. There will be some tough times, probably some layoffs, and people will hurt. The economy will be slow. Then before you know it things will start to come back. Prices having stabilized, your wages increasing, your buying power will feel better than it has in a long time. Life is good, and with your renewed confidence you and your friends will go head long into debt acquiring all the things you think you deserve. The economy on fire, the buying frenzy, as good as it feels,  will have unintended consequences, though, and things will change.

Not really sure what happens next.

In reply to Peabody :

We've seen these cycles run long enough that people barely lived to see the end of it. The Great Depression lasted decades. By the time the French Revolution came around, at least 2, maybe 3 generations had grown up in grinding poverty. I feel like I've been in one relentless, long-running trainwreck that started around the Great Recession when I got my first job. So I'm not encouraged by the thought that it's temporary.

GameboyRMH said:

In reply to Pete. (l33t FS) :

There isn't the same amount of stuff or same supply, we're not competing for a static amount of manna falling from heaven. Supply for most things has increased and is easily capable of increasing further. Economies of scale make them cheaper...and possible to produce with less labor.

Housing isn't getting any cheaper.  And the cheap ones get snapped up by investment companies to flip for a profit.  $140k homes in my area are now $300k.

If I want to buy a home, I have to price my labor at a rate that affords me this.

GameboyRMH said:

 

This is what I call the "hidden value in technology" theory, and it doesn't pan out. The idea is that our technology is so advanced now that there is some hidden economic value in it, like a modern smartphone is secretly worth more than a million Commodore 64s, and therefore it's kind of okay that younger generations can't afford much more than that.

But there is no hidden value. The value was in the R&D that went into designing it and the cost to manufacture it. It's all been accounted for like anything else, so a $100 smartphone is worth exactly $100 in today's money. It's also odd that nobody applied this to TVs or early home computers in the past.

I wasn't trying to imply that there was some kind of "hidden value", only that not everything has gotten more expensive.

bobzilla said:

GameboyRMH said:

Toyman! said:

Take the top 5 higest paid of Fords leadership. Add up their total compensation, $79,000,000.00, and disburse it to all of Ford's employees. 

Their total raise will be $0.22/hr. 

Again, not enough to offset inflation or even be noticed. 

Taking the top 1, or the top 5 employees is basically the same problem at a slightly different scale. It's not about the top X number of employees, especially if is a 1-digit number, it's about the top 5-9% of employees whose pay has increased with overall productivity vs. the bottom 90%+ whose pay has barely budged since the '70s.

This is why we can't have a decent discussion with you about economics. You let feelings get in the way of facts. They are not the same. 

Average hourly wage in 1979 for Ford that I can find was $6.80/hr. Adjusted for inflation, that would be approximately $29.37. Today's average hourly wage with Ford is $30.44/hour. It has kept up with inflation just fine. 

Keeping up with inflation is not the same thing as wage growth. Up until about 1970 wages increased with GDP. Wages have been flat since then and the middle class has declined. 

How many families do you know nowadays that live off of 1 salary, buy a new car, have kids, buy a house with a swimming pool and go on a nice vacation every year? I don't know of any. GDP keeps going up, and it's going somewhere else...

Pete. (l33t FS) said:

GameboyRMH said:

In reply to Pete. (l33t FS) :

There isn't the same amount of stuff or same supply, we're not competing for a static amount of manna falling from heaven. Supply for most things has increased and is easily capable of increasing further. Economies of scale make them cheaper...and possible to produce with less labor.

Housing isn't getting any cheaper.  And the cheap ones get snapped up by investment companies to flip for a profit.  $140k homes in my area are now $300k.

 

If I want to buy a home, I have to price my labor at a rate that affords me this.

This is something this discussion hasn't really touched on.  PE, investment companies and developers have snapped up a ton of rental properties and private residences in the last decade.  This has not only driven up the price of starter homes, it's fueled a massive increase in rental rates across the board.    

In reply to GameboyRMH :

This is what I call the "hidden value in technology" theory, and it doesn't pan out. The idea is that our technology is so advanced now that there is some hidden economic value in it, like a modern smartphone is secretly worth more than a million Commodore 64s, and therefore it's kind of okay that younger generations can't afford much more than that.

But there is no hidden value. The value was in the R&D that went into designing it and the cost to manufacture it. It's all been accounted for like anything else, so a $100 smartphone is worth exactly $100 in today's money. It's also odd that nobody applied this to TVs or early home computers in the past.
 

Wow, not even a questionable link this time, you just straight made up your own theory.  

The value isn't hidden. We used to have to pay money for records, tapes, CD's, video tapes, DVD's, video games, etc.. They cost real money that was a real part of your budget, if you had one. Or they were real debt. Going by memory, a CD cost around 3 times the hourly minimum wage, a DVD 4 times. It was a significant expense, especially if you were lower income. Now you can stream pretty much whatever you want whenever you want. The technology in the average pocket today is incredibly valuable. Endless entertainment, GPS navigation, access to the world's information (and misinformation,) anyone can have a voice and influence, everyone has access to investment opportunities. It has a camera and video studio rivaling anything out of 1975 Hollywood. You can use it to run a business, rent out your car or a room, make extra money. I'm just scratching the surface, if you had this technology in 1975 you would be the wealthiest person in the world. That's not theory. 

But the sad truth is that the technology or standard of living isn't the issue, it's you. No matter how much you have, it won't be enough if someone else has more. You can't see that you have it better than 99.9999% of the people before you, you just see that .0001% that have it better. Which should be a good thing, it should be incentive to learn how they got there and what you can do to get there. But you just want to complain and blame the very types of people who have enabled you to live the comfortable life that you don't appreciate. That makes me sad. I'm not here to put you down. I'm here to tell you that you are putting yourself down, and you are better than that. 
 

Driven5 said:

In reply to Steve_Jones :

Luck is a significant factor in each of our success and struggle. The notion that our success or struggle is entirely within our control is just as much a fallacy as the notion that our success or struggle is entirely outside of our control.

The truth is that each success or struggle we face is some combination of luck and choices. Sometimes choices and luck are on the same side, sometimes choices overpower luck, and sometimes luck overpowers choices. Each of which can happen for the better or worse, and can also stack with each other to have a compounding effect.

Luck is a factor, 100% but to say the field is stacked against someone and then when they do make it happen, attribute that to luck, is dismissing the commitment and work that went into it.  It is insulting to dismiss the sacrifice they made, especially if you think they were at a disavantage in the first place.

"The playing field is not fair" so what? You can a). accept that or b). play harder, we all make choices, some chose B

In reply to Steve_Jones :

How about this, the field is stacked against whole generations, lots put in hard work, only a few succeed, those who succeeded benefited from some combination of hard work and luck. Occasionally just one of the two but usually some mix of both. And the people who succeed are usually the least disadvantaged of the group - stats on child vs. parent income tend to back this up.

But what about the people who put in the work and didn't succeed? Maybe they've worked harder and sacrificed more than those (likely less-disadvantaged people) who hit it out of the park on the first try. Is ignoring the role of luck not insulting, dismissive of the sacrifices they've made?

Also if ever-increasing fractions of the population are putting in hard work and not succeeding that looks like a worsening problem to me. "Playing harder" can also further benefit those who are already benefitting from the unfairness of the situation if a person can't afford to start their own business and tries "playing harder" at somebody else's.

In reply to Steve_Jones :

Luck is a factor, 100% but to say the field is stacked against someone and then when they do make it happen, attribute that to luck, is dismissing the commitment and work that went into it.  It is insulting to dismiss the sacrifice they made, especially if you think they were at a disavantage in the first place.

"The playing field is not fair" so what? You can a). accept that or b). play harder, we all make choices, some chose B

Who was it that said "You make your own luck."? 
 

I'll share a couple personal examples. I have a nephew that graduated HS last year. He was a good student, could have went to college, but wanted to work with his hands and be outdoors. He also didn't want to spend 4 years in school accumulating debt when he didn't have a subject that he felt passionate about. He was motivated, went to Lineman school, and recently graduated. He didn't wait for a local job offer, he applied all over the country. He took a job in Texas, and moved. He signed on as an Apprentice, he's going to be working towards Journeyman over the next couple years. He'll be living near the job sites out of motels and camping trailers for the next couple years. He's good with his money (he invested in the stock market instead of the latest fashion as a teen,) he'll be a millionaire before 30. 
 

Another nephew is a couple years older. Got his pilot's license as a teen, went to work half way across the county as an unpaid intern. Lived in the hanger, did whatever they asked of him. Ended up finishing the season as a crop duster (paid, and paid very well,) later put himself through aircraft mechanic school while he did crop dusting. He's in his early 20's and recently bought a twin engine plane. 
 

They are both smart, hard working kids (unrelated to each other, one on my side one on my wife's) but what they really had in common was desire and the willingness to sacrifice and do what it takes to succeed. They gave up a lot of the silly E36 M3 kids usually do at their age, and will be rewarded for it for the rest of their lives. I'm sure people will call them lucky, or say their success is unfair, but they know the truth. 
 

BTW, my Lineman nephew's class was huge, close to 300 graduates. So there are a lot of young people that don't buy the "no opportunity" arguement, and there are plenty of other high paying in demand professions out there. 

In reply to GameboyRMH :

I've said it before, and I'll repeat it. I remember when you were filled with excitement and hope because you were taking a huge risk (moving to Canada) because of the opportunity it afforded you. Nothing was going to stop you from taking control of your future. I miss that guy.

In reply to Steve_Jones :

Again, that guy is either still me or was a figment of your imagination, and I don't know which. I wasn't excited or particularly hopeful. A friend asked me if I was excited just before I moved and I told her no, I wasn't going there to visit an amusement park, I was going there to job hunt. It wouldn't be fun, it would be work. I thought I could get a job similar to what I used to do and therefore make similar money to what other people in the industry make, not realizing that Canadian employers see no value in or distrust foreign experience.

It's a common mistake a lot of immigrants to Canada make, and to make things worse I probably assumed I wouldn't have all the same issues because I lived there when I was a kid. But during the pandemic I picked up a job at an ultra-demanding hellish workplace that was trying to cosplay as a decent place to work, it paid decent average money at least and I was able to save up hard and buy the Toyobaru before I burned out of it after 3 miserable years. Then a few days ago I made a couple of little driving mistakes on course which wrecked all the front-end bodywork and likely the engine so I'm kind of back at square one now, but having to live with the fact that I obliterated so many years of work with 2 seconds of avoidable mistakes.

Sometimes I think about whether moving was a smart decision - if I could go back to how things were the summer before I left it's not something I'd dismiss immediately, but I have to remember I wasn't leaving how things were, I was leaving where they were going, which was years of stagnant income against inflation that were progressively impoverishing me, a job that was poised to get a lot worse as I was leaving, and the realization that local opportunities were even slimmer than I thought and worsening. I left the last decent IT job in the country behind knowing that going back wasn't an option, and the role no longer exists now. Corporate IT as a whole is kind of disappearing now, "cloud services" have hollowed it out into top-level admin/system architect positions and the helldesk.

It's kind of messed up how threads about the economy end up being about me. Maybe discussing it can help us move on from that though.

Wow, this devolved. 
 

Had a long reply lined up, but see the lines drawn and see no point in trying to use my experience to add to this. 
 

Have fun.