this post was submitted on 10 Sep 2024
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The slowest loss of buying power in the last three years means very little when it was preceded by absurd inflation since around the covid lockdowns, is my point. Yes it is good news, but often deceiving good news. People dont have more money, their money is just worth slightly more for a slightly longer period of time.
Wages are rising. When they are rising slower than inflation you lose byuing power. When they rise faster than inflation your buying power increases. The latter is the case for quite some time already. So now the increase is happening faster even.
"We lose buying power because there is still inflation" is the most idiotic "I neither understand inflation nor economy"-argument in quite some time.
Sorry but wages are not rising above inflation.
Yes, wages increased by 6% in 2023 already, for a slight increase in real wages while inflation was high. With a lot of the lifting being done by thelast quarter +5,6% wages vs. 3% inflation. For the first quarter of 2024 it's +6,4% wages vs. 2,5%... oh, and the usually focused group of low earners is at the top with +8,8%.
Now we are down too 2% inflation... and you still pretend this actual target number aimed for is still rising faster than wage growth.
The last time real wages sunk was in 2022, so we had 1ยฝ years of increased inflation adjused wages already, with inflation still going down.
So you're saying, things getting less bad is not good news?
Cancer in remission is actually bad news, because it's just shrinking, and not gone yet?
Inflation is supposed to be at about 2%. That's the goal of the ecb. And if you look at a longer scale, that was met, because the decade preceding covid had hardly any inflation.
You just want to be pessimistic about everything.
I mean .. It's not shrinking though. It's still increasing, just at a slower rate.
So the cancer would still be growing, just not as fast. It's certainly not a remission, as you mentioned.
Also it's mostly due to comparatively low gas and oil prices. If you don't have a car, your heating works with gas and because it was a very mild winter you didn't even need to heat much anyway.. it's basically useless.
Oil and Gas prices going up was also cited as a main driver for the inflation of all sorts of goods, including basic food.
Problem is now "somehow" the prices remain high on these goods whereas the energy prices are back to normal again.
And that's factually not true, because - again - no understanding of economics.
What counts are the real wages. If inflation is 2% and wages rise by 2%, nothing changed.
Real wages dropped due to the high inflation over the last years, but that also turned into higher raises. And over the longer run, 10-20 years, it's not that bad.
I think they're saying that while it's good that things are getting worse at a slower rate, they're still getting worse.
Of course, one can argue about at what level of inflation things are still getting worse.
But they are not getting worse. People just don't understand economics. They just see a number or headline that happens to align with their beliefs and then barf their ignorance into comments.
I mean, there's that, but while there's rough consensus that a bit of inflation is a good thing for the economy, it's not undisputed fact, the exact target number isn't undisputed either, neither is whether it would be a bad thing if we just had inflation way higher than that, or how to measure inflation in the first place, and the benefits to the economy don't necessarily translate to a specific person's situation. So it's not necessarily just ignorance, and thus doesn't necessarily justify condescension.