If they laid everyone off they wouldn’t be able to exist. Can’t have fat cats without rats to feed them.
Are we starting to see the wage increase vs inflation increase death spiral?
- Thread starter Zenduri
- Start date
Interesting article in The Spectator - Why Inflation will soon be over.
"If you feel we’ve entered into a new inflationary era, you are an economic conservative. You may believe in secular inflation thanks to the following: Brexit, trade wars, de-globalisation, Covid and Ukraine, which have all created shortages in manufacturing, oil, and wheat that we are powerless to fix. Perhaps you believe that sinister world leaders, business interests, and cartels control the markets in all this stuff and have decided to restrict it. Or you may think that central banks have been printing money so recklessly, and for so long, that finally there is too much money versus stuff.
If you feel the current inflation is just a blip, you’re an economic progressive. You may believe inflation is temporary because of the following: innovation is a constant of human progress, a benign deflationary force that continually reduces the cost of living for everybody. You may think that globalisation has stumbled but is fundamentally alive and well, providing ample supply of anything we need, and any attempt to sanction, tariff or control goods results in more production elsewhere or substitute technology. And although protectionist economies may print excessive money to bail out vested interests, the United States’s Federal Reserve has not resorted to outright currency debasement and is even now withdrawing the amount of dollars it (sensibly) printed in the Covid crash."
"If you feel we’ve entered into a new inflationary era, you are an economic conservative. You may believe in secular inflation thanks to the following: Brexit, trade wars, de-globalisation, Covid and Ukraine, which have all created shortages in manufacturing, oil, and wheat that we are powerless to fix. Perhaps you believe that sinister world leaders, business interests, and cartels control the markets in all this stuff and have decided to restrict it. Or you may think that central banks have been printing money so recklessly, and for so long, that finally there is too much money versus stuff.
If you feel the current inflation is just a blip, you’re an economic progressive. You may believe inflation is temporary because of the following: innovation is a constant of human progress, a benign deflationary force that continually reduces the cost of living for everybody. You may think that globalisation has stumbled but is fundamentally alive and well, providing ample supply of anything we need, and any attempt to sanction, tariff or control goods results in more production elsewhere or substitute technology. And although protectionist economies may print excessive money to bail out vested interests, the United States’s Federal Reserve has not resorted to outright currency debasement and is even now withdrawing the amount of dollars it (sensibly) printed in the Covid crash."
Everyone in quotes was everyone they needed to sack obv. Not everyone
my Marxist freind.
Lol at that spectator rubbish.
Of course inflation is transient, prices reach an equilibrium, its the consequences of that level relative to wages and currency that matters.
I do wonder about people, some seem to think everything will be magically OK, it won't but that doesn't mean it can't be.
Just to add, the reference to globalisation beggars belief, obviously they think people who do productive jobs are worthless.
Globalisation is a direct route to low wages and bad working conditions, the few with money to spare will be able to buy useless stuff for peanuts.
Of course inflation is transient, prices reach an equilibrium, its the consequences of that level relative to wages and currency that matters.
I do wonder about people, some seem to think everything will be magically OK, it won't but that doesn't mean it can't be.
Just to add, the reference to globalisation beggars belief, obviously they think people who do productive jobs are worthless.
Globalisation is a direct route to low wages and bad working conditions, the few with money to spare will be able to buy useless stuff for peanuts.
Soldato
- Joined
- 23 Nov 2014
- Posts
- 7,961
- Location
- The Cronx
I’d take anything in the Spectator with a fist full of true blue salt 
Hope doesn't pay the bills, it just gets you in more debt. The government and opposition have lost their understanding of making the economy work, cheap money allowed cheap borrowing and made many investments appear viable, cheap money was only ever a very short term sticking plaster. Now the piper must be paid.
Not on it's own, no but hope provides drive and ambition to win the war that others have thought to be lost. So what's the plan then? For those that have to sit in their upper middle class ivory towers and let it all go to hell in a handbasket by stifling the economy and making people cold, hungry, jobless and homeless, rioting in the streets? Is that what you want for your children and their children? I would hope not.
Soldato
- Joined
- 23 Nov 2014
- Posts
- 7,961
- Location
- The Cronx
Exactly, you need deflation for that which is equally as bad.
Permabanned
- Joined
- 7 Aug 2017
- Posts
- 2,141
- Location
- by the tower the one up north ..
there is no hope .. there is only action and reaction .. people over stretched themselves thinking the world is a unicorn .. now they will pay for it .. just like the down turn in 2008 .. i lost almost everything .. and learnt a lesson .. as will they ...
You don't sound bitter at all...
Permabanned
- Joined
- 7 Aug 2017
- Posts
- 2,141
- Location
- by the tower the one up north ..
no i'm not honestly .. but i did have to work hard to get myself back up .. and keep the kids fed
..as will those out there will have to do .. but i have nearly no debt and a healthy bank account .. so it did teach me a lesson ... while the rates where low and people believed they would stay that way .. they got silly .. mostly young (my daughter included) she's 3 yrs into a iva with 3 to go .. even tho i told her and tried to steer her right .. but they will come out of this stronger ..
as will the country ...
Most young people are "daft" with money and decisions and, by daft, I mean spend/do things with no thought of the future but that's the privilege of youth - to be carefree and that's completely fine.
I do agree there comes a time to stop that attitude but, unfortunately, we have people in their mid to late 20s or older who simply haven't or refuse to grow up.
Unfortunately the people in their 20s didn't really experience the 2008 crash or were not affected as much and, when they came to get a house, their only experience was very low rates for 10+ years. Why would they think it would suddenly stop?
Parents and older people may have warned them but, generally, who really listened to the ruminations of the weary old man in the corner when they were young?
I'm not absolving anyone of at least some level of responsibility by what I have written above but there are some in society, and in this forum, who are actually gleeful that the younger generation(s) are going to suffer... I think that says more about them than the younger people.
I do agree there comes a time to stop that attitude but, unfortunately, we have people in their mid to late 20s or older who simply haven't or refuse to grow up.
Unfortunately the people in their 20s didn't really experience the 2008 crash or were not affected as much and, when they came to get a house, their only experience was very low rates for 10+ years. Why would they think it would suddenly stop?
Parents and older people may have warned them but, generally, who really listened to the ruminations of the weary old man in the corner when they were young?
I'm not absolving anyone of at least some level of responsibility by what I have written above but there are some in society, and in this forum, who are actually gleeful that the younger generation(s) are going to suffer... I think that says more about them than the younger people.
Associate
- Joined
- 31 Jul 2018
- Posts
- 254
The decades long suppression of inflation has built an inflation bubble that's is going to poop at some point, wage increases now is but a reaction to the bubble starting to give way not the cause and the war in Ukraine is but just a pin.Firstly this isn't a thread to discuss if pay increases are deserved or are a reasonable request given working conditions or lack of historic increases as thats a whole new topic to go down.
However, it's to discuss the fact we are seeing more industries striking for better pay of demanding better pay in the last 4-8 weeks citing inflation and the cost of living as one of the primary reasons. While it is understandable to demand more pay during a time of inflation this in itself has the risk of pushing up labour costs and therefore prices which in turn, in theory pushes up inflation even higher, wiping out the pay increase and generate more demand for even higher wages
A few examples of recent increases and demands are below
Given:
Sainsburys workers 5.3% increase
PWC 7-9% increase
Rejected/Demanded/Disputed:
Barristers 15% pay increase demanded
Doctors 30% over 5 years demanded
Royal mail offered 2%, offerered 5.5%, rejected both demanding higher
Rolls Royce £2000 payment offered and rejected, 4% increase rejected
Railworkers offered 2% and 4% rejected, 7% demand
British Airways demands 10% increase but only to restore this to pre covid levels
Ryan Air (unsure of demands)
Does anyone think we are on the cusp of a wage/inflation death spiral? Are we expecting more and more industries and workers to start demanding more pay? If so, what is your take on the situation and if you dont think we are at the risk of entering this spiral whats your thoughts on how we are/will avoid(ing) this?
People are over thinking this, it's obviously a hangover from covid and now the Ukraine war. Inflation will fall fast next year.
Am I a financial guru? no, but call your bank, get a fixed mortgage for a long period and realise it's still low rates. The banks are greedy grubbers, do you think their swathe of actuaries haven't calculated all this?
The only thing you should be thinking about is how to profit from falling inflation.
Am I a financial guru? no, but call your bank, get a fixed mortgage for a long period and realise it's still low rates. The banks are greedy grubbers, do you think their swathe of actuaries haven't calculated all this?
The only thing you should be thinking about is how to profit from falling inflation.
Permabanned
- Joined
- 7 Aug 2017
- Posts
- 2,141
- Location
- by the tower the one up north ..
i'm honestly not seeing what you are ... 2 yrs ago i got a 10yr fixed for 1.82 ..there now 3.3+ ..reverting to 4.7+ .. 2-5yr are 2.5-3.1 .. they are still going up .. seeing as covid and the Ukraine war will be with us for at least another yr or 2 and the yet looming gas price
i really can't see inflation falling ? @11% now next yr it will prob hit 16% or more .. you have the problem of food world wide most cereal and fruit harvests are going to be lower by 15-20% the thing you should be thinking about is how stable i'm i can i ride this out ....
My sister got a 10yr fixed @ <2% three months ago.
Stop reading the proletariat news media, they're always one step behind. Goldman Sachs is usually ahead of the game, they're forecasting a fall in inflation next year.
Disposable income is falling, exactly for the reasons you raise, that has to be deflationary.
To point out the obvious, EVERYONE is forecasting inflation to fall within a year or two, because the primary drivers are staff shortages after Covid and the Ukraine invasion. Both of those are likely to stop having any real effect sometime in the middle of next year. The Covid recovery will be back to normal by late this year and the Ukraine issue will be sorted one way or another (even if the war continues, the West will find other energy sources) by this time next year. It will be a little different in the UK, because we will still suffer the effects of Brexit. Sorry, of course we'll see the Sunny Uplands. Wage rises have nothing whatsoever to do with driving the current inflation. The main driver is rent-seeking by oil and utility companies.
But...
That doesn't help anyone now. Unless you are in the top part of a company then you've probably not had a pay rise at all, or at best, something below inflation at that time. The bosses have done just fine of course - they've had pay rises well above inflation. I've had two pay rises in my current job, plus a temporary uplift for three months. I am still behind where I started three years ago. That (or worse) is the reality for most people.
As for Trade Union action, I will remind you that the only time in recent history that inequality in this country decreased was the late Sixties into the Seventies. When Trade Unions were at their most militant. It's not a coincidence that inequality in work has increased massively since the Union laws were changed by Thatcher, because that was the point. The long term plan is to weaken regulation so much that even Unions cannot fight for a reasonable wage. Look forward to a world where almost everyone except the top management is on zero-hours contracts, while technically self-employed, and with no protections or benefits. Those protections are what Brexiteers were talking about when they said that they would removed EU rules.
Apart from it didn't.
https://equalitytrust.org.uk/how-has-inequality-changed
Your argument is good without needing to resort to dishonesty to support it.