Is Corporate Greed Causing Inflation?

In reply to GameboyRMH :

But this alternate history would be economically indistinguishable from our own. The exact same arrangement has been achieved through a different mechanism, one that obscures any control people have over it, or even that the "tax" has been collected, to the point that few people realize it's happened, much less have any idea how to fight back against it.
 

(Sigh.) 

There are eight pages detailing exactly how to "fight" against it. There have been numerous people telling you how they controlled their own futures prospered under the system. For some reason, you keep explaining how you don't believe in it, refuse to participate, then complain that it's not working for you. While it's not perfect- it's by far the least worst system in the history of mankind. I have yet to hear you, or anyone on the planet, propose a better system. You focus so much on the negative, that you fail to see all of the benefits and opportunities. What evidence do you have that a person who fails under this system would prosper in another? 

The key that you are missing- The system is not supposed to change for you. You are supposed to change. You are supposed to learn, adapt, grow. If you increase your value, you will increase your income. Why should you make more if you didn't increase your value? Why should someone pay you more if there are plenty of others willing to do it for less? And why is that the employer's fault? When you go shopping, do you demand to pay over the asking price? Assuming no, then why would you expect employers to just pay more than the market values the labor? 

In reply to GameboyRMH :

Back on page 4 you said:

GameboyRMH said:

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.

You're right. Threads about the economy end up being about you (and your opinions).   The way to avoid that is to post less in them.  
 

I'm not trying to silence you, but there are a lot of people who strongly disagree with your ideas.  It's hard to have a conversation about the economy when you take over any discussion with ideas that just don't make sense to many of us.  Those ideas have not worked for you, and they wouldn't work for me.

Perhaps it would be worthwhile to put more energy into listening to ideas that have worked for many, and less energy into nonsensical debate.

You are a brilliant man with great potential.  Don't squander your genius.  You are not a victim.

In reply to GameboyRMH :

I typed out a response to this yesterday and ended up deleting it. Boost and Sv Rex basically covered it. 

I'll add that I had a similar mentality until I was in my 30s. I was working a dead-end job in retail that paid very little. No insurance, no retirement. The boss didn't particularly want me to get ahead because then he'd have to replace me. I was basically coasting through life expecting everyone else to push me ahead. 

I don't know if I matured a little or just got pissed off at my situation but I made a decision to change my outlook and expectations. I changed jobs, worked my ass off, and talked to every successful person I could about getting ahead in life. The one thing I noticed about all of them was their level of confidence in themselves. They know they are in control of their destinies. They know that at the end of the day, the person responsible for their success or failure is the same person they see in the mirror every morning. They know they can do what is necessary to get what they want out of life. 

I would love for you to come in here one day and tell us you had the tiger by the tail and were winning at what you do. If there is anything I can do to help you, let me know.

It starts with a choice, a life-altering decision that you make every morning. 

Toyman! said:

So, back to the original topic. 

Are companies giving out raises based on the inflation numbers? 

Should they? 

Or should they try to get prices back down to pre-inflationary numbers by keeping their costs down? 

 

 

I am playing catch up from a few pages back but I wanted to reply to this. 

I work for a company that is dependent on mega corporations. Our largest customer is in a position where they made record profits last year but their earnings report shows that they did not meet an expected X% increase in profit and in doing so they are scrambling to reduce costs. Our process is about a million dollars per year more expensive than doing it in China without calculating shipping delays, assuming that we and the Chinese supplier are on par quality wise. The company wants us to reduce our cost by $1m annual and to grow that reduction by 15% annually for 10 years. 

Our productivity has been exceptional for this manufacturer, and our defect rate has been their lowest supplier rate for 8 years. 

So we have choices. We fire the customer. We cut costs. Either way another companies unrealistic expectations are affecting my pay and it sucks.

GameboyRMH said:

In reply to Steve_Jones :

Oh not for free, I don't make money by owning things, I work for it. The people who think they deserve other people's money for free are the ones taking greater and greater fractions of workers' productive output over time just because they have the power to. Ask them if there's a limit to how much more of it they think they're entitled to or if they'll stop taking more any time soon (and why not).

You are paid for work based on the value you bring to the job.  Wanting more money without bringing more value, is wanting it for free. Why do you deserve to be paid more than others with the same skill set? I am just trying to understand, because from what I see, people are paid for work at a rate they decide is worth getting out of bed for, if you have decided you will clock in for $x an hour, and it's not enough, that's on you.

In reply to Toyman! :

I don't know if I was lucky or cursed, blessed or damned but I was always taught that the way to better yourself was to, you know, better yourself. Do all that you can to make yourself worth more to the company you work for. I never once, not even in college when I had $20-30 to last for 2 weeks to buy gas (to get to work and class) and food, thought that I should get part of someone else's money because they were doing better than me. 

So when I quit college and joined the working world I did everything I could to make myself more valuable. Got certifications, became the dependable guy that always showed up, early, ready to work and willingly showed management that I could take on more responsibility for more pay. I'm no millionaire (although I have made a million in my life) but with the help of a supporting wife who knows her E36 M3 we are ready for an early retirement, have a second property to build our retirement home on and are happy (as we get at this age) with where we ended up in life. At just under 50, I am glad I never went the other route expecting someone else to help me up or give me what I think I deserve. Everything we have was earned, and not a single thing was a handout. 

To be honest, those with the attitude that I owe them or was given anything is insulting and makes me angry. We hear from acquaintances all the time "it must be nice" when we are talking about something we did or somewhere we went. These people also have the latest phone when it comes out, buys new vehicles every 2-3 years and are constantly in debt to their eyeballs because of poor choices. I didn't put you there, you did it to yourself.

GameboyRMH said:

No stock-based investments here (had some RSUs at my last job but sold them all off over the last few months)

"and"

Oh not for free, I don't make money by owning things, I work for it.

I'm a math guy by both profession and by world view...If I'm not building mathematical models at work, I'm building them on my own time to best understand this crazy thing called life.

For example, I'll be 60 in three weeks and I'm very, very well aware of the fact that my median life expectancy is 20.5 years with a standard deviation of 9.1 years.

One metric I've collected and closely watched for well over thirty years is my organic to inorganic growth ratio.  Basically, I look at how much my net worth increases over time and I work out what percent of the increase is coming from asset appreciation from existing stock & real estate holdings (organic) relative to what percent is coming from earned income (inorganic).

At this point in my life, my earned income only represents 36% of my total wealth appreciation...in other words, nearly 2/3 of my gains occur autonomously.

Essentially, I've rendered myself largely irrelevant which is an alternative way of saying that I'm well positioned for retirement.

It's clear to me and many others on this forum that you're very bright...is the system perfect (hell no)...is it going to change (nope)...do you possess everything needed to make it serve you well (ohhh yeah).

It's like those post cards that say "having a great time, wish you were here"...please consider joining us at least a little.   

It seems everyone wants to make these threads about me when I'm talking about a problem that affects at least 91% of people with jobs. Lessening my own income problem or even putting myself on the side of the problem that benefits would do nothing to solve the problem. The problem isn't that I don't make good money. The problem is that 91%+ of the population is increasingly not making good money so that the rest can make increasingly ridiculous amounts of money, and I just happen to be on the E36 M3ty end of that stick along with most of the population, including most of us on here. On average, an employee making $100k/yr these days is proportionately getting ripped off by their employer just as badly as a minimum wage worker. I'd like to think I'd still be pissed off about that no matter how much I was making.

Yeah I guess I forgot about those RSUs I owned for a few years, easy to do when I literally worked for them and their collective value probably wouldn't cover what my Toyobaru's front end damage will cost to fix. I'm not sure I made any profit on them either. I had a coworker at that job who said he had set his to liquidate as soon as they were issued to him, I thought that was kind of odd at the time, but after seeing all the BS involved in dealing with them, with taxes and restricted periods, it actually looks totally reasonable.

I don't think my skills are a problem. I already have skills that are supposed to be valuable, in an industry with a ridiculous nonstop learning treadmill. I've known plenty of people who make good money doing the same kind of work I've done in the past. It's just been seemingly impossible for me to get those jobs, previously because there were few of them available where I lived and they only opened up if someone died or retired, or more recently due to some bizarre distrust/disregard for foreign work experience. Very different to the last place I lived, when I was about to move away an American expat friend joked that if I worked overseas for a bit and then quickly moved back I could make multiples of what I had before.

I don't like to brag but some of you might be surprised to learn how hard I've worked and how much initiative I've taken, because I keep getting the impression that people think I'm a slacker who hasn't tried putting in any effort to see if that pays off. That job I used to have where I did software development and sysadmin? That started out as a data entry and DB admin job. I turned it into that by taking on more responsibility and learning more. Pay didn't improve much though. Later I spent 3 years at a fast-paced high-stress horror job. It paid pretty ordinary first-world money, which was a lot for me. I didn't spend too much and built up some healthy savings because I knew it was unsustainable and precarious work and eventually I told them I was unhappy with it and decided I wasn't going to work myself to death just to try and keep up there. So the end result of that job was 3 years of decent but unremarkable pay, some health problems and severe mental burnout. More recently I've started my own business earlier this year, most new businesses cost as much as a new 4-door sedan but I managed to keep this one down to new motor scooter money. its flagship service is offering something to mere mortals that's hardly ever been available outside of million-dollar-budget productions before. I was so convinced it was a killer idea that I did minimal market research using only the most private search engines to maintain first-mover advantage. I knew that a similar service that didn't have the same production capacity and faced far more roadblocks (thus not being able to operate where my idea could) was a profitable industry so I figured it was safe. Right now I'm starting to suspect it's just a high-effort way to slowly lose money. Recently I've expanded the business into much more traditional work and made more money in 1 day of that than my hot new idea made in 8, with an order of magnitude lower equipment costs and way less work overall.

So yeah, the hard work/initiative/pulling on bootstraps stuff, I've tried it, no luck so far.

In reply to GameboyRMH :

You are making these threads about you. You underestimate the prosperity of the average worker and overestimate the prosperity of the average employer. Your whole argument lies in the fringes, yet you try to apply it to the mainstream. 91% of people with jobs? We know you just made that up to make a point, but why? Why did you say 91%? Look around you. Look around your town, look around the country. Look at the average home people live in. Look at the cars people drive. The vacations they take. The crap they buy. The  average person is doing pretty well. You would have us believe that the chosen few live in looming castles while the rest of us peasants live in grass huts with dirt floors. Look around, there is prosperity all around you, and it's not 9% of the people. 

How would you know who is getting ripped of by their employer? Many employers make less than some of their employees. Some lose money. Many fail. They don't make their employees give their money back when they fail. You are learning how tough it can be to start a business. I hope it works out for you and you are successful. If that happens, and you need to expand your business, what will you pay your employees? Are you going to split it even? I hope not, as you put in the effort, pushed through the failures, and took all of the risk. 

GameboyRMH said:

I'm talking about a problem that affects at least 91% of people with jobs.

You're absolutely right and I so much wish it wasn't the case.

I call it the "squishing balloon" where the middle class has been getting pinched sending some up and others down on the economic scale.

The reason you're getting so much push back is that your solutions are either random, untested rolls of the dice or have essentially been attempted in the past with absolutely disastrous results.

Add to that the fact that many here have prospered well within our current system...again, is the current sytem perfect (hell no).

If you work hard, live below your means, and don't foolishly gamble on immediate riches, the odds are not just high but they're far higher than any alternative that you'll accomplish your objectives. 

That's why you're getting so much push back...we're fully aware that the current system isn't perfect but the alternatives are both unproven and could be disastrous.

In reply to Boost_Crazy :

I didn't make up 91%, all my numbers (and my statement that employees are, on average, getting ripped off by their employers) are based on publicly available economic data. 91% is the minimum fraction of workers who make what I could label as "suppressed" wages that have been largely stagnant since the '70s. 95% is the maximum number, the top five percent has wages that follow the same curve as the top 1%. I haven't been able to find any data in between top 5% and top 10% incomes so I'm not sure exactly where between those the transition point is or how sharp it is.

Yes I see a lot of seemingly ordinary people spending what appears to me to be inexplicable amounts of money. I wouldn't ignore data in favor of personally-visible anecdotes, but I would think it's because 1: they've been making decent money ever since they've been out of school, something I've barely experienced and 2: they're neck-deep in debt, which the economic data would also back up, and any financial hiccup they experience would send "their" new Tesla, fishing boat etc. right back to the bank.

In reply to GameboyRMH :

So the entire world is suffering and those that aren't have done it wrong therefore haven't actually done it. Well, I guess what I've done just didn't happen then according to you. And many of my friends. And several coworkers. We are all lying about it and you are the only one who knows the truth. How convenient. 

In reply to GameboyRMH :

The reason I interpreted many of your posts about finance, government, or business as being about you is that a lot of the posts come across as sour grapes. Im not sure if it's intentional, but when you use yourself as an example of the system being broken it goes from being a general discussion to a discussion of you. 

As I said before you need to take control of your career and manage it as a business. Decisions need to be based on goals, data, and objective observations. The same way you should be looking at your business to determine what is and isn't working, you need to do the same  for your career and then make adjustments.

One final thought about your business, there is an older article from Harvard business review by Ulwick that may be useful to read. You may not be interviewing potential customers but taking look at what you are offering and what they are trying to accomplish from a new perspective may help better target your customers needs.

In reply to bobzilla :

Those who aren't suffering haven't necessarily done anything wrong. I would say anyone who never had a say in anyone else's pay doesn't deserve any blame in all this. You could easily have a Geoff Hinton-level AI scientist who gets paid like a top NFL quarterback and didn't do anything wrong, maybe even a pop star like Taylor Swift who pays their staff extra well and might deserve negative blame.

Even among those who do share blame it's spread out over many people. The people who probably deserve the most blame are executives at medium to large companies (I've even seen a few small ones that would apply) who could easily choose to pay their employees fairly instead of hyper-rewarding those at the top but don't, and especially execs who also arrange no-poaching deals with competitors and put noncompetes in their contracts.

Yeah, same damn argument literally every time. It's always those evil execs holding you down. 

I'm out. I don't have time to rehash the same stupidity over and over. 

In reply to bobzilla :

I mean, if you're making lower-91% pay they are the ones holding your pay down, collectively, so that they can pay themselves increasingly absurd amounts of money and pay the rest of top management enough to not get upset about it. That's not the sum of my personal income problems, but again that's not what this is about.

In reply to GameboyRMH :

Here is some good news for you. 

FTC bans noncompete requirements. 

Now you can take your skills and start your own business or go where you are valued more without having to change industries. 

So unless you're in the top 9% pay wise you're getting held down by your employer?  That's the biggest pile of E36 M3e I've heard in a long time.

So unless I'm paying my employees in the top 9%, I'm holding them down?  Regardless of their performance, qualifications or experience?  

So despite the fact I'm taking all the risks, have spent all the money setting up the business, on my education etc, I shouldn't make more than them?

There have been several years where I've made almost nothing.  Should I not have paid my employees then?

I think you should be a solo business owner with employees.  Then you'll quickly understand....

IIRC Gameboy lives in Canada.

Our politicians are currently feeding everyone the narrative that evil corporations are the ones to blame for all our financial woes up here.

Nevermind that four years ago the government pumped billions of dollars into the system and didn't think it would cause inflation.

Nevermind that the government taxes the hell out of everything that moves, then spends the money like a drunken sailor with a two day pass.

Nevermind that in the last 9 years, the government has added tens of thousands more civil service employees. Federal government increased number of public service employees by more than 40%

No cost/benefit analysis is ever done on any of this spending but it's all corporate greed to blame.

I don't doubt that record corporate profits carry some of the blame but government officials who've never run a business, meddling with the system has a lot to do with it too.

I'm trying to run a business and I'm getting tired of there being someone with their hand in my pocket before I even get to make a profit.

It's like Joe Pesci in Good fellas. F- you, pay me...

GameboyRMH said:

The people who probably deserve the most blame are executives at medium to large companies (I've even seen a few small ones that would apply) who could easily choose to pay their employees fairly instead of hyper-rewarding those at the top but don't, 

They pay market rates for what the Employees bring to the table.  That is the very definition of "fairly". 

I'm going to skip all the nonsense about non-millionaires retiring early and the dreadful plight of the common man above.  

Corporate creed isn't causing inflation (though I suspect there is some advantage is being taken in some corners of the economy).  The root cause is available buying power spread sccross a wide swath of consumers.  Some call this pent up demand, but basically everyone is falling all over everyone else to buy buy buy.

I have zero patience for people complaining about costs of things yet continuing to absolutely gorge on goods and services.  I'm not directing that at anyone in this thread, it's just what I see in my neighborhood and among my friends and co-workers.   Everyone I know is going on vacations, to concerts, buying expensive toys.  It's getting silly.

WilD said:

I'm going to skip all the nonsense about non-millionaires retiring early and the dreadful plight of the common man above.  

Corporate creed isn't causing inflation (though I suspect there is some advantage is being taken in some corners of the economy).  The root cause is available buying power spread sccross a wide swath of consumers.  Some call this pent up demand, but basically everyone is falling all over everyone else to buy buy buy.

I have zero patience for people complaining about costs of things yet continuing to absolutely gorge on goods and services.  I'm not directing that at anyone in this thread, it's just what I see in my neighborhood and among my friends and co-workers.   Everyone I know is going on vacations, to concerts, buying expensive toys.  It's getting silly.

^This -  

What gets me is those same people who are buying everything they can get their hands on keep trying to tell me we are in a recession.  I've never seen a recession where people keep buying stuff.  I thought recession means money is tight so you can't get credit to buy anything.  Maybe i'm wrong..

ShawnG said:

IIRC Gameboy lives in Canada.

Our politicians are currently feeding everyone the narrative that evil corporations are the ones to blame for all our financial woes up here.

Nevermind that four years ago the government pumped billions of dollars into the system and didn't think it would cause inflation.

Nevermind that the government taxes the hell out of everything that moves, then spends the money like a drunken sailor with a two day pass.

Nevermind that in the last 9 years, the government has added tens of thousands more civil service employees. Federal government increased number of public service employees by more than 40%

No cost/benefit analysis is ever done on any of this spending but it's all corporate greed to blame.

I don't doubt that record corporate profits carry some of the blame but government officials who've never run a business, meddling with the system has a lot to do with it too.

I'm trying to run a business and I'm getting tired of there being someone with their hand in my pocket before I even get to make a profit.

It's like Joe Pesci in Good fellas. F- you, pay me...

The situation is nearly identical here in the US.

In reply to GameboyRMH :

In reply to Boost_Crazy :

I didn't make up 91%, all my numbers (and my statement that employees are, on average, getting ripped off by their employers) are based on publicly available economic data. 91% is the minimum fraction of workers who make what I could label as "suppressed" wages that have been largely stagnant since the '70s. 95% is the maximum number, the top five percent has wages that follow the same curve as the top 1%. I haven't been able to find any data in between top 5% and top 10% incomes so I'm not sure exactly where between those the transition point is or how sharp it is.

I think you are reading too much into the misleading headlines and misinterpreting the data. I get it, most of the info out there is presented in a manner that suggests something is wrong. Here is why it's misleading.

What does stagnant wages really mean? I see that in numerous articles, you've said it many times. It sounds bad. What it means is that average wages in relation to purchasing power has remained relatively constant over the last 50 years or so. Which makes sense when you think about it, why should the balance have changed? We work both sides of the equation, overall it should stay fairly constant. Why should it go up? If anything, we have unbalanced the equation with higher government spending over that time period. What is not mentioned is that while purchasing power has remained constant (a better word than stagnant,) overall the goods that we have available to purchase are much better than they were previously, resulting in an increase in the standard of living. 

The other thing not often mentioned is that wages are consistent when compared to industries as a whole. But at the individual basis, wages most certainly are not. The vast majority of people will make more in their 40's than they did in their 20's. They gained experience and new skills. If they are at the same company, they are making more than when they started. Most companies will pay more to retain the more experienced and skilled workers, at least to the point where the production supports the wage. If they don't, then that experience and skill can be shopped to a competitor on the job market. If it's of value, someone will pay for it. But only if you put it up for sale. 

Yes I see a lot of seemingly ordinary people spending what appears to me to be inexplicable amounts of money. I wouldn't ignore data in favor of personally-visible anecdotes, but I would think it's because 1: they've been making decent money ever since they've been out of school, something I've barely experienced and 2: they're neck-deep in debt, which the economic data would also back up, and any financial hiccup they experience would send "their" new Tesla, fishing boat etc. right back to the bank.

Both are true. There are a lot of people who are doing well, and there are a lot of people pretending to do better than they are (debt.) Most people do both of these things during their life, and the sooner they realize that fake wealth is the wrong path, the sooner they can get on the path to real wealth. Debt is like giving yourself a big pay cut. Not only are you spending extra money on interest, you lost the opportunity cost of putting that money to better use (investing.) I'd also argue that those who cannot afford what they are buying are largely responsible for driving up the costs of those that can. People compete for goods with their dollars, and when people have access to "free" money in the form of loans, it drives up the cost of those goods. 
 

In reply to docwyte :

These numbers don't necessarily apply to every business. Remember that these are national averages, so these numbers are a mean of everything from a newly opened food truck where the owner's practically volunteering at their business while still paying employees, to Oracle and Tesla. So if you work at that struggling food truck you're probably getting an exceedingly generous share of the company's profits, and if you're working at Oracle you're probably getting ripped off harder than we can possibly imagine.