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It really doesn't appear that your hypothesis is the primary reason we are seeing these increases (so far). At least not from what I've read or from most of the examples being shared so far. Why do you see it differently? Serious question.
This is a big part too. Tons of people haven't been working and now they are trying to staff back up.
Just spitballing, but I do see lumber coming back down some. The bottleneck is mills, not wood (tree farmers are getting low prices). There is a huge amount of inflation on container ship costs which affects a lot of worldwide commodities - sugar, coffee, etc. Those should moderate somewhat down the line. The industrial commodities - silver, gold, steel probably don't crash back down. Used cars is a bubble that will pop when Americans don't have govt. slush funds burning a hole in their pocket, but housing will stay very high - housing supply is incredibly low.
I'm a simple guy with simple thought
Thx for the reply. I'm seeing/hearing the same thing on lumber. Is that the whole story on used cars? I've heard anecdotally that there are auto part supply chain issues affecting manufacturers' ability to churn out new cars. Housing might stay high, but what is driving the low housing supply? Is it a temporary, artificial decline in geographic mobility because fewer people moved during the pandemic? Is it a flight from urban to suburban areas? A flight from multi-family (e.g. apartments, condos) to single-family housing? It's not clear to me what the underlying trends really are.
I'm not disagreeing with you that tax increases and minimum wage increases will lead to inflation. I'm just asking out loud whether that is the #1 reason we are seeing inflation right now. @Sand for example has offered reasons that are specific to individual products (e.g. lumber) that have nothing to do with the minimum wage or tax increases.
My argument was that currently it doesn’t appear wages are driving these prices and that some places having raised wages is good for the workers. That I would love to see wages keep pace with inflation over the years to keep people being able to afford things. That they too are “every day people” and I want the American workforce to be well compensated.
I agree that is a large part of it...which is why I took exception to someone blaming $15 and hour talk.
Add in cars and computers right now and the shortages due to computer chips being in high demand.
So the pay raises are not suddenly happening and no taxes so far have been risen on the rich.
Must have. Lumber is up 1000%Is there a wage/tax bill that's been passed I am unaware of?
Used cars - consumers have stimmie checks and can't wait to spend them. What to spend them on? Yeah - cars. Americans love cars. Love cars way above their income capability. So cars they are buying in all shapes and forms. When that money dries up used cars will come back down. I suspect a lot.
Fortunately I’m sure all that money went to people who are struggling to feed their families or pay rent......
My point was increasing the minimum doesn’t give people more purchasing power as all goods and services increase stripping out minimum wage hikes.
This is essentially true, but it takes time, sometimes a lot of time. In the interim those on minimum wage would have more spending power. But you’re right that eventually it goes away, creating a new demand to raise minimum wage.
There is a reason that used cars have gone absolutely ape####. Money in hand must be spent, so they are.
1. Stimulus monies started under DJT (not political, just fact). 2. Economy was roaring back under DJT (again, just a fact). 3. Fed continues to hold at ZIRP (DJT, JB, same-same over both). 4. Folks are coming out of this pandemic with a strong desire to make up for lost time. Think 1920s.
wages have increased because of liberals pushing the laws and Biden's administration seems very happy to escalate that as well as punishing successful wage earners so while the latter isn't yet a reality, it soon will be
https://www.paycor.com/resource-center/articles/minimum-wage-by-state/.
Sorry, just getting back this now, hectic day. Employers are now competeting with the government for labor. If people are making $2600/month on unemployment in Michigan, why would they work for $10-15/hour? One of the big winners in this is owner-operator truckers. They can basically name their price if you want goods hauled - and that will affect price.
Market forces are pushing it to $15/hour and they still can't be filled. Lets pay them $20/hour, just don't complain when the price of goods and services rise because of it.
Sure. There are issues there. But this current inflation and prices we are seeing don’t seem to be related to wage increases.
Its already rising...part of the complaint should legitimately be about the extension of unemployment. But when we see that fizzle...we will see more of those jobs filled, no?
I would eliminate the extra money today and most everyone will be looking for a job tomorrow.
Do we get to decide that? Maybe I wouldn't mind that a few Americans are having their lives better for once instead of my tax dollars going to fix a bridge in bum #### Montana I'll never drive on.
I am far more likely to pay for a bridge than you with the gas taxes I pay - that money goes to the roads.
On a macro level we’ve pumped tons of stimulus into the economy. Take the stimulus checks alone. Think about if just a fraction of that was spent by every American who received it. What percentage increase in consumer spending would it be? So we have money in the economy that we essentially printed to prop up the economy. Unless the economy is extraordinarily weak it will lead to inflation just from the demand side. There are also supply chain disruptions due to Covid that is causing some of it. Take furniture for example and couches in particular. They are months in arrears as some chemicals used in fabric treatment apparently are being rationed to those companies due to them being used in masks etc.
Sports memorabilia especially older cards and ticket stubs, some furniture items, rental cars due to fleet sales
Main problem there is supply. Some furniture stores have waiting time of 6 months or more.
Yep. I’ve got a new rental condo we are about 5 months in now on the sofas and they just finally gave up and gave us higher dollar ones that matched our other furnishings to get it settled. We are still down barstools, chaise loungers, and a dresser. We also are now over two months in waiting on shutters. Got renters showing up at first of June so have to get it fixed.
