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The Cost of Living
Sep. 24th, 2006 01:18 amOkay. I'm gonna talk about economics, but I'm gonna try and make it quick and simple, so don't just scroll past, unless you really want to.
And with the warning out of the way, here I go.
Inflation is the term used to describe prices getting higher. And it's only sort of what I'm talking about here, because inflation is complicated and has roots in a lot of the things that make the economy work, so it's not always a bad thing.
But what's bad about it is how it relates to wages. Suppose, for instance, you're working retail, or some other per-hour services job. If you're lucky, you'll get a raise of about 25 cents an hour each year, MAYBE higher if you're really lucky or dedicated or good at kissing ass. All well and good, right, you're getting more money.
Except, a lot of the times, you're not. Inflation in the US is often between 2% and 4%. Let's go with 3%, which seems to be a pretty reasonable number averaging out for this past year. So, you get your 25 cents an hour raise, and go up to, say, $7 from $6.75. That's an increase of 3.7%. So you're making more money in a real sense, but not much more money. Your "raise" means you're getting paid pretty much exactly what you were the same time last year in terms of buying power. That's not a raise.
And that's one of the problems with stagnant wages like we've had here for years. People don't actually get paid more, even if they do get a cost of living increase. It's more absolute money, but that money can't buy as much. In the meantime, however, and despite the best efforts of the Bush administration, the inflation adjusted GDP has gone up several percent. Now, if a lot of regular workers are getting .07% or so of that increase, where's the rest going? Hmm.
And with the warning out of the way, here I go.
Inflation is the term used to describe prices getting higher. And it's only sort of what I'm talking about here, because inflation is complicated and has roots in a lot of the things that make the economy work, so it's not always a bad thing.
But what's bad about it is how it relates to wages. Suppose, for instance, you're working retail, or some other per-hour services job. If you're lucky, you'll get a raise of about 25 cents an hour each year, MAYBE higher if you're really lucky or dedicated or good at kissing ass. All well and good, right, you're getting more money.
Except, a lot of the times, you're not. Inflation in the US is often between 2% and 4%. Let's go with 3%, which seems to be a pretty reasonable number averaging out for this past year. So, you get your 25 cents an hour raise, and go up to, say, $7 from $6.75. That's an increase of 3.7%. So you're making more money in a real sense, but not much more money. Your "raise" means you're getting paid pretty much exactly what you were the same time last year in terms of buying power. That's not a raise.
And that's one of the problems with stagnant wages like we've had here for years. People don't actually get paid more, even if they do get a cost of living increase. It's more absolute money, but that money can't buy as much. In the meantime, however, and despite the best efforts of the Bush administration, the inflation adjusted GDP has gone up several percent. Now, if a lot of regular workers are getting .07% or so of that increase, where's the rest going? Hmm.
