Wages, Biden and Inflation

The wages are going up. This is good news. You can look for the video by Robert Reich with Chipotle in the title.

What happened was not even predicted by economists. But by providing unemployment benefits for a longer period in 2020 and 2021 the government gave people a chance to look for new jobs. With a lot of businesses slowing down services due to the pandemic, they were not needed for a while. Even if they came back to a similar job the pay was raised. Now that we are ignoring the pandemic, mostly, the service jobs are back. With raised wages.

Republicans are not making note of any of that. They are reminding us retirees that there is inflation. Food costs more. The government caused it! Biden caused it!

Well, the pandemic bail outs and unemployment certainly had that effect. But it was already well on its way to the current state before January of this year. Trump and Biden could just stand on the side lines and observe it. Presidents do not cause the economy. But occasionally, with the Obama-Bush bailout and now the switching jobs phenomenon, the trend over even a half year does help us along. Hopefully we raised stagnant wages. But the CEOs, including the Chipotle CEO in Reich's video, also got raises. 

It will be curious to see the long term effect. Rarely does the life ot the one percent and the working class go up at the same time. Maybe we found a more efficient way to work, working from home, so we spend less on transportation and such? Hard to predict.

The inflation? Well, the federal reserve has a small effect. But there will be inflation. The workers will only enjoy the raised wages and income for a short while. In 5-10 years they will be exactly where they were before the pandemic. Maybe we need that free community college.

Reich talks about raising prices when the sellers/providers have control of too big a chunk of the market:

https://robertreich.substack.com/p/truth-about-inflation

Note that big business does not care about "the economy" the way politicians tell us to care, and work hard and tighten the belt. Growth and acquiring more of your sector is the goal. Inflation is irrelevant to big business.