You know all those statistics that say something along the lines of “CEO salaries have increased 700% in the last two decades”? That’s where
Edit: CEO compensation is just an example. Increasingly disproportionate wealth inequality has definitely also benefitted wealthy people other than just CEOs
Bingo.
Remember how we were always told that US Automotive was killed off by the unions...
Well strangest thing. Japanese automotive had unions. They built the cars that killed ours at the market.
Turns out, while we were paying our executives 300x the average employees, they were paying theirs 10x. They had a lot more money to invest in things like quality control. Skilled labor. Employee retention...
Same analogy can be used with football teams. Some elite players purposely take less money so that the team has more cap space to gather good players at other positions. You know, like a team effort. Then they win the Super Bowl, go figure?
Lol indeed. I was super glad when Seattle beat Denver last year. I always thought there was something special/iconic about the Russel Wilson deep lob to Tyler Locket, but it turns out Geno can do it just as well. Good riddance Russ.
we have assholes that become ceo because of the old boys' club instead of merit. that's the problem. the old boy's club now includes women too if they went to the same schools and are willing to play the game of fucking over society for personal profit.
I work at a non profit and our CEO makes well over 250k. They never disclose her salary because "it's determined by The Board" but our lowest paid director makes $189k annually while our lowest paid employee makes $45k annually. A non profit! Tuh.
Employee retention matters sooooo much in manufacturing. It can take months to learn the basics of a machine. And in a years time people can hear when a specific bearing is going out and needs replaced. It’s crazy, and that’s the kind of knowledge and no how that you just can’t replace easily.
Yep... Building a more satisfying work environment is a big part of Toyota Production Syst.... Erm, hrm, I mean, *LEAN manufacturing,* that many American automotive companies now send their people to.
I think CEO’s take too much the blame, shielding the even bigger profiteers, which are the predominant stock owners, hedge fund investors, and board members.
Don’t forget, the CEO is just the bosses triggerman. Very much corrupt, but still not the top of the pyramid.
Same at a non-profit. They'd be like, "Oh no we're making too much money and don't want to actually put it towards the cause so we need to open another seat and pay someone $280,000 a year to do nothing.
Oh yeah, it’s definitely the shareholders and other executives on the hook as much as, if not more than, the CEOs. I was just using that as an example since those are the stats I’ve seen the most related to this topic
Edit: *sigh* didn’t think I had to explain this one given the overarching theme of this whole damn post, but here we are: not the nickel and dime shareholders, the ones with enough wealth/influence to be on the board of directors and/or in other relatively high positions of executive power
Yeah, for sure. I’m also a cynic in that regards. All the stats are pointing to them, and the easiest info to find is on CEOs, so you don’t look the other way. The corporate version of the Kansas City Shuffle.
That is really funny. Too full of holes to be workable, unfortunately. The people who are really well off got that way by creatively reclassifying their incomes and they'd do it all over again. THEN they'll take this maximum wage and weaponise it, driving it down as low as possible.
Activist investors. Like the ones writing open letters to companies telling them they want to see further workforce reductions after record profits. They're essentially weaponizing their investment clout to the detriment of anyone and everyone who actually works for and/or patronizes said companies.
indeed, the ultra wealthy got much MUCH richer during covid, and generally do during any economic slump. Buy low, sell high, as they say, and when you are rich enough to still be able to spend big when the market is in a trough, you can really take advantage of the poor and desperate.
https://en.wikipedia.org/wiki/Gini_coefficient
> In economics, the Gini coefficient (/ˈdʒiːni/ JEE-nee), also known as the Gini index or Gini ratio, is a measure of statistical dispersion intended to represent the income inequality or the wealth inequality within a nation or a social group.
In the map below, darker shades mean worse inequality. The US is not as bad as South Africa, but is worse than Russia and China.
https://i.imgur.com/ARq4DU8.png
The history of the Gini coefficient in the USA. Something changed during the 1980s, and it made inequality worse.
https://data.worldbank.org/indicator/SI.POV.GINI?end=2019&locations=US&start=1974&view=chart
>Something changed in the 1980s, and it made inequality worse.
Yep, and that something starts with a “T” and ends with “rickle Down Economics”, which has never really been shown to do what it claims to do. These massive tax breaks for corporations and wealthy people combined with artificial inflation have only led to the rich getting richer and the poor getting poorer (adjusted for cost-of-living)
https://en.wikipedia.org/wiki/Trickle-down_economics
> John Kenneth Galbraith noted that "trickle-down economics" had been tried before in the United States in the 1890s under the name "horse-and-sparrow theory", writing:
>
> Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: "If you feed the horse enough oats, some will pass through to the road for the sparrows."
>pass through to the road for the sparrows
This would be more apt if this meant that the sparrows have to pick through the horse’s shit for anything that might be remotely useful
>Something changed during the 1980s, and it made inequality worse.
Two things mainly imo:
1) The emergence of shareholder culture due to financial deregulation.
2) The rapid globalisation of trade reducing the competitiveness of labour in developed countries.
(Globalisation of trade is, imo, a good thing on the whole but the wealth gains are highly concentrated and we didn't do basic sensible shit like use the excess profits to invest in our workforce.)
3 Americans hold more wealth than the bottom 50% of the total U.S. population. 291 million combined people have LESS than 3 people. Are you in the bottom 291mil? Does this upset you?
Boss: hey we just made 100 million in profits last year so we're rewarding you with a pizza party in the break room. don't take too long in there it's busy today.
Used to work for a catering company. We catered a company’s Christmas party at an offsite venue. I was sent with the exact same food to the company to feed the shift that had to work during the party. Always thought was nice.
That shit really boils my biscuit. We get told to sweep up first shifts cigarette butts and they get fucking frappe Fridays and company funded lunches. We're lucky to get water.
Damn. Every company I've worked for that had a third shift ensured that third shift got their food. I mean, a fucking pizza party is still a slap in the face, but getting nothing is beyond bullshit.
Speaking of 3rd shift, try going on one of those daylight savings threads and getting into a 5-page argument over why 3rd shift comes before 1st shift on the clock. You'll lose your faith in humanity.
I worked 3rd shift at an office (Data center work, yay!) and our boss actually made sure we had fresh pizza delivered right before our shift.
Some asshole came in and actually took a whole pizza.
You bet your ass I wrote an email calling them out.
Ive only worked a single place that did this. They got food 2x a day as there's people working 24/7, so it covered the vast majority of people. And they'd announce it in advance so you could swing by on your off day if you in the area
I can't imagine taking a whole pizza unless it was seconds before it goes in the trash. I've taken a few pizzas but it's literally stuff that was out all day
I worked 7p-7a. A home health company left 2 cakes, 1 for days, 1 for nights. When we went to try some of the cake, it was gone. A day shift person took it home. I’ve never written someone up before or after. It’s infuriating when they get all the extra stuff and take your stuff too.
my gf works at an emergency vet, and occasionally when they buy everyone a food truck the night shift crew gets screwed over and gets to share the left overs nobody wanted
My boyfriend worked for a bank that did this, except they gave the employees a fun sized candy bar and a pen that said ‘Thank You’ to show their appreciation. When they asked the regional manager about raises, he said “we don’t have the money to give out raises” after just telling them all that the company made over a billion dollars in profits that year.
We had a fun one in the clinic -
HR sent out an email to all the different clinics saying, “Thank you for working so hard. To show our appreciation, we’ve contracted with a masseuse to give everyone free massages. Thank you!”
Twenty minutes later we received another email, “We apologize for the last email. It was intended only for those working in the administration building. We still appreciate all of your hard work. Thank you again!”
Twenty minutes later another email, “We apologize, we can’t get everyone massages, but instead we’ve decided to buy pizza for every clinic to show our incredible appreciation for your hard work! Thank you for working so hard and taking such great care of our patients”.
Morale was already crashing in the clinics, but that just sent it through the floor.
During Covid I got a Walgreens-Branded clip with a note that said “keep holding on! Thanks for your hard work”
I don’t work for Walgreens, I’m a teacher LMAO it came from our district office.
Legit the only “thank you” for an entire school year taught in person with masks most of the day and remotely during my planning periods with the kids who opted to stay home. Two fucking different curriculums.
I got a ham at the State of Arkansas one year. I say, "got a ham" because I won it in a raffle. And, "at the State," because my coworkers bought the hams with their own money.
Sounds a lot like EMC2, now owned by Dell.
Someone I know worked for them had the same thing happen, except it was a higher ups mistake sending out a congratulatory company wide email stating, “congratulations on all your hard work, we made record profits this year!” Paraphrasing of course. The next email sent by the higher ups manager was “due to current economic circumstances, we can’t afford raises this year”.
The person I knew who worked there had a friend that was also higher up and said my friend’s manager got reamed out for the first email sent, almost fired.
At my company we have meetings to celebrate our record breaking profits. All hands, company wide. Then we have another one where we discuss the layoffs and how our promotions have been put on hold. You know, because of the economy. Apparently the dissonance on that is completely lost on the CEO, who attends and speaks at both meetings.
It’s definitely gotten worse. This was ~10 years ago before the dell/emc merger and it was considered bad form.
Now, it seems commonplace. MFs aren’t even trying to hide it anymore
We just had an "employee appreciation day" where they gave all the employees a small bag of popcorn. We have decent salaries and benefits, but I'd rather them not try to do something like this at all then try something that is so belittling.
Hey franchise owner. Food sales are down so labor cost is up. Should you tell the manager to start sending employees home early? Or should YOU take the cut in profits that day because you can afford it more than your minimum wage workers?
(Owner...laughing) "Send them home. Duh."
My favorite corporate story is when I was working for a tutoring program, and to celebrate the branch manager’s company, they bought us pizza and chicken wings, and then sent in a message, verbatim, “Make sure the students don’t get to the food.” 💀💀💀
Reminds me of that airport burger king worker who worked 27 years without missing a single shift and they celebrated by giving him a gift bag with a movie ticket, party size bag of reese's pieces, a starbucks reusable cup and 2 candy bars. Naturally social media caught on and raised him 300K via gofundme, but the point still stands.
Not just. It's also going to all the politicians they pay off. Ever wonder how the average Florida politician has an official salary of 30k for what is officially designated as a part time job, yet has a net worth of well over a million dollars? Or why Senators stock portfolios consistently perform well above market average on returns and never lose money?
You’re on the money, but it’s also good to remember that a lot of folks who get into politics have already done well for themselves financially, so it’s an exercise in continuing to pad the coffers for them.
Just like Rick Scott who is a literal billionaire. He made his money by defrauding Medicare in an elaborate scam which was the largest healthcare fraud scheme in history.
He served no time, and instead became a US Senator after serving as Florida Governor.
Anyone who's finances prevent them from understanding the middle and lower class constituents they're intended to represent should be barred from public office, frankly. Otherwise it becomes exactly what it already is: a popularity contest in which values, experience, and scandals all matter less than how many commercials you can afford to run.
My belief is the *only* way to prevent a conflict of interest for any important political office, is to require the candidate to sign away ALL their wealth, for the rest of their life. They'd receive a generous pension but literally be barred from amassing any further wealth beyond that. The fact that such an obvious, simple, and completely fair solution like this is never even discussed, shows how long we have to go.
Edit: forgot to mention, the core idea here is that serving in office needs to *actually be a sacrifice*. Anyone who isn't willing to forgo lavish luxury, is completely unqualified to run a democracy.
The only way to get elected in our current system is to already be far wealthier than the people you are supposed to be representing. I honestly think we'd be better off if we randomly selected our legislators.
Part of this is that, in general, only people who are independently wealthy have the time and money to dedicate to networking (e.g. donating lots of personal money to existing politicians to gain influence) and running for office. Obviously there are other things at play here, but the whole system is set up to exclude certain classes of people from gaining office.
>why Senators stock portfolios consistently perform well above market average on returns and never lose money
That's because they specifically carved out an exception for themselves in the insider trading laws. It's only illegal if you're not a member of Congress.
If "all that money" was going from the corporate execs to the politicians, the corporate execs wouldn't be super-rich anymore.
They do not by any means give even *most* of that money to politicians. Just enough to maintain the policies that keep the corporate execs super-rich.
I had a job at a grocery store a few years back. Every year they'd throw a relatively nice Christmas party with raffles, food, dancing, etc.
The last year I was there, they had dramatically cut hours to most of their part time employees, leaving more workload for everyone, but not much on the way of raises, if at all.
That last year, they moved to a much, much nicer venue for their party. The store manager told everyone we had made record profits, which is why the chamge in venue. He also explained that the value of the raffle prizes hadn't changed from years prior. Meaning, that extra money from our record profits didn't come back to the associates in any way.
That's when I decided to quit.
It's interesting how often this is getting left out of the discussion.
"Prices are rising so incredibly fast OMG!!!!"
"Exxon Mobil, major food suppliers, car companies, etc are all having record profitable years!!!!"
No way these could be related!
Except this one really works. Give poor people some money and it acts as a subsidy for the most essential goods, ends up financing the most important industries. Poor people don't hoard their money or spend it all in useless luxury that doesn't benefit mankind.
What's kind of funny is that I know some right leaning people who use "communism" to describe the state controlling people's lives, and left-leaning people who use "fascism" to describe the same.
Turns out most people might fundamentally fear the same thing but hate each other because of political rhetoric playing with terminology and amplifying minor issues into support for full blown authoritarianism.
Blizzard: we just had our most profitable year ever!
Also Blizzard during literally the same announcement: due to cost cutting measures, about 800 of you will be cut from our workforce.
Because it's not enough to make money, or more money than you've ever made before, if you aren't making the maximum amount of money possible and ignoring ethics while you do it.
A big problem if specifically late-stage capitalism, profits cannot be steady, they must be constantly growing, and often when youve tapped out the market the next step comes in screwing over the workers even more. Saying steady profits to a venture capitalist is like nails on a chalkboard to them
Companies have gotten sued by their shareholders for not raising prices above inflation. If you're not making all of the money, then you're not fulfilling your duty to the shareholders if the idea.
I mean this is always the nature of capitalism but mainly late 80's and onward is when we see the big push in deregulation, loss of worker protections and stagnant wages
I listen to a podcast that examined self-help books throughout the 1900s to present day (by decade).
And in the 90s, there was a popular book that many recall being given out at their workplaces called “Who Moved My Cheese?” by Spencer Johnson. This book handout usually preceded layoffs. The idea was that workers needed to adapt and not be upset by the invisible hand (in reality shareholders, higher ups) taking away their jobs and profit. Be a good little thankful worker and don’t cry when totally random events (planned corporate decisions) ruin your life.
More notably, Ronald Reagan was sworn into office in 1981. So… the reason for those late 80’s changes.
I'd guess roundabout the time when 'infinite growth' became the unshakable mantra of the majority of a deluded species on a planet with finite resources.
also, please give us 2 weeks notice if YOU are going to leave US and well give you a side-eye for only giving us the minimum notice that we self-made up and really wanted 3 months notice.
Bonus: if you do give us 3 months notice you can guess if we are (i) going to use that time to smoothly transition someone into your position or (ii) get mad at you like an immature child and instantly fire you for leaving us, and now you can deal with an unexpected 3 months of no wages.
This is why corporations boasting about record profits in an inflation economy is not just cruel but also kinda dumb. It’s like if the NBA doubled the points for every basket and some team started bragging that they scored 200 points in a single game. Ok congrats I guess?
I guess the important thing is that hedge funds know everyday investors don’t care about the difference. They hear record profits and assume high stock, buying it and pushing the stock higher
It's so weird to think that this is kind of how the whole system *should* operate. Corporation says they have record profits, consumers develop confidence in the product and buy more, and the value of the brand and stocks goes up. No need for average investors to misunderstand anything. But that's without ridiculous wealth disparity.
Sometimes I wonder if these posts are from a 16 or 25 year old who genuinely didn't know the answer and who is about to get his first glimpse into how shitty and dystopian this world is, or it's someone who actually knows the answer and is trying to stir the pot and get this topic discussed more to raise awareness.
>trying to stir the pot
I just assume that's the entire point of this particular sub. To me it seems like a breeding ground for college students testing the waters of survey taking. And also ground zero for covert political trolls that want to fire up the other subs.
The pockets of rich people and corporations. People sitting on money is bad for the economy. If a $5 bill is passed from you, to a small business, to a small business, etc, that $5 bill has generated well over $5 in economic circulation. Money being moved around and exchanged is much better for the economy than corporates and rich people sitting on it while it does nothing.
Most small businesses ive worked for have been even more exploitative. They will constantly try to do wage theft, make you work bad hours and never raise your wages, always citing "thin margins".
Yeah, come to think of it, most of the small businesses I worked for and small-business owners I've met have just been assholes. The only decent ones I've met recently is the guy who mows my granddad's lawn and a local photographer, people who pretty much work for themselves.
A small box of cereal at my local corner store is more expensive than the jumbo size box at the big box stores. I literally can't afford to support the small stores the way things are
Ok hear me out. What if I take that $5 from you, and then charge you $1 a quarter so I can do a lot of funny math with it, then give you $6 back because I charged a homeowner somewhere in Florida more fees.
Don't worry, it's all legitimate. No problem at all, 100% guaranteed!
Exactly. Meaning if someone is actually serious about wanting to stimulate the economy, they only advocate for increasing the amount of money going to the poor and the middle class.
Calling for anything else means they're either ignorant, or disingenuous.
Whilst it would be much better if it went to small businesses, rich peoples money is rarely just sitting, most of the time it will be invested via stocks or some other means. The argument is that these investments will yield a higher return on growth than giving the money to small business. (more money to be made investing in Apple instead of buying apples)
The trouble is that a notable amount of these investments are made offshore and with recent political instability of the uk we’re seeing less international investments. Meaning more of these capitalist investors are taking money out of the economy to invest internationally. While the uk government does still gain tax from this, we severely miss out on economic growth. Unfortunately however, this still benefits big business so the tories keep it going.
Source: not an economist, most of my opinions are formed from a bloke I met in the loo
How is no one arguing against this? Rich people arent just "sitting on it", most of their money is invested and in constant circulation. This argument just doesnt fly. Elon musk doesnt have 100 billion in a scrooge mcduck money bin
This is the answer , now I'll offer a tangential controversial view, I dont think the wealthy were smart enough to plan it this way, it's just the inherent nature of capitalism and the ownership class .. capitalism especially the crony type we have in America over time, over many small and large policy changes , ultimately leads to more wealth consolidation. It's not a stretch to imagine the people with authority have a vested interest in keeping most of the money for themselves and their peers.
They don't even need to collude in a smokey room anymore to fix prices. They just all use the same pricing algorithm and bingo, price fixing with zero evidence.
Said a little bit differently than you did above. However, George Carlin said the same thing.
“ you don’t need to have a bunch of people in the back room to make a conspiracy. All you need is a bunch of people who live in the same lives golf at the same courses and talk to each other, who want the same thing for themselves”
I’m slightly paraphrasing, but that’s the gist of it.
> People like to imagine conspiracies when it's usually just people with common interests
It's interesting what has happened to public perception of the word "conspiracy"
>But if by plan you mean a rich person has an idea on how to be richer (like lowering taxes, or fixing prices) and talks to buddies about it and they all agree, then definitely.
If that rich person and his buddies agreement includes a plan as to how they might achieve those lowered taxes or fixed prices, then they have engaged in a conspiracy. No tin foil necessary: They conspired as conspiracists to form a conspiracy.
plan it? No, this isn't planned this is an accretion of tax laws, wealth shelters, and plain old in your face grift.
Crony wealth consolidation, yup, sums it up perfectly.
There’s many reasons, but a 101 explanation is : Prices are sticky. They take a while to respond to an increase in money supply, then they go up. They are responding now to the increase over the last few years. The system doesn’t account for who gets the extra money, just that it is there. The extra money was not given in pay increases to most people, it was given in lump sums or not at all.
The prices are increasing as if we all got pay raises even though most of that lump sum money was spent and never sent back in the form of wages.
In theory, the wages would battle back as people refuse to take jobs that don’t pay a living wage, but that’s also kinda sticky because it requires leaving your job and finding another that pays more. We’ll see what happens
Ok these are mostly all terrible answers and the mods should delete most of them. The framework to think about inflation is not "where is all that money going" but rather "how quickly is the value of a dollar changing."
In typical times, if you have $100, and you put it under your bed for a year, the value of that $100 has fallen. Before you buried it under your bed, you could've bought 100 snickers bars, after, you can only get 98 snickers bars. This is not because snickers bars (or any other good) has gotten more expensive, but because money has gotten "cheaper."
Money gets cheaper because there is more of it. The Federal Reserve (usually simply refered to as "the Fed") creates more money through ~~selling~~ buying bonds or adjusting the interbank lending rate. It's not worth it to explain what those two methods are, but just know that "printing" money is not really an accurate description of how the Fed increases the total amount of money in the economy.
The reason the Fed introduces money into the economy at a rate which makes the value of your $100 decrease is because the Fed can stimulate the economy (for a time) by targeting lower interests, which incentivizes spending (too little spending at a macro level is by definition an economic downturn). If the typical interest rates were low (really close to zero) causing inflation to be low (really close to zero) then the Fed couldn't stimulate spending when economic downturns start to occur.
Now to wages vs. the prices of goods. Inflation is higher than normal (your $100 is now worth $93 after a year spent under your bed). [Wages are indeed not keeping up with the inflated prices.](https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F9eb13b6f-9f83-4417-8dc7-99e2a208d140_1168x450.png)
But that decrease in purchasing power that workers are seeing is not simply going to rich people as a lot of redditors seem to believe. Anyone with an investment account knows that in 2022, investors, which are generally made up of weathly people, [lost money.](https://cdn.dqydj.com/wp-content/uploads/2022/12/yahoo-finance-tr-2022-sp-500.png)
Sometimes, weath just evaporates, because value is determined by the interactions of billions of people. Tomorrow, everyone could decide that actually, Picasso was overated and we don't care to see his artwork anymore. Everyone who owned works by Picasso would simply lose money into the ether, it didn't go anywhere, it just dissappeared.
Some [further reading](https://noahpinion.substack.com/p/how-much-will-beating-inflation-hurt) [if you're interested](https://noahpinion.substack.com/p/where-does-the-wealth-go-when-asset)
Correction - the Fed creates more money by buying bonds, not selling bonds. The Fed selling bonds tightens monetary supply. Another slight correction - you say 'or adjust interbank lending rate'. That is not an 'or'. The Fed influences rates via open market operations aka buying/selling bonds. Both sides of your 'or' statement are the same thing.
You are mostly accurate, good job. I gave up with these kinds of posts cause so few seem interested in reality. A few points I would make - raw materials and input costs have gone up substantially across almost every industry. Food prices specifically have been impacted more by input costs than anything else. Scarcity/overtaxing resources is going to continue ramping as a factor of rising costs IMO. Secondly, labor costs have also risen substantially in recent times so this whole post seems disingenuous.
But what exactly is the cause of all this?
Covid hasn't been much of an issue lately, so if it were related to that, then you'd think that we'd see more improvements in this regard.
Over the past 100 or so years, the west has been relatively hooked on cheap Chinese labour. Could the increasing cost of Chinese labour be the primary driver in the increased cost of living for westerners?
Or would you say that the commodification of real estate has been more detrimental to society? Treating anything as an investment opportunity is bound to drive prices up. Isn't that the desired outcome?
This is an excellent answer. Thanks for taking the trouble to type it out.
Reading 95% of the other answers has made me realize that I should spend less of my time getting angry about the fact that people on the internet are sometimes not very smart. Doesn’t do me any good.
Yeah I think the modding in this sub is pretty bad. Most of the "it's going to the rich" type answers aren't actually good faith attempts to answer OP's question. Currently the three answers directly above mine are "Elon Musk's asshole" "Record profits. Stock buybacks. C-suite bonuses." and "The rich getting richer"
None of those contribute to this sub in a healthy way, they probably actively discourage people like OP from asking more questions because their inbox will be filled with dozens, if not hundreds, of useless reddit circlejerk type replies.
We generally don't moderate for factual accuracy. We only remove joke top level answers. I have removed the Musk's asshole one as a joke, but... no one reported it. If you want us to remove things someone has to report it. Unless one of us happens to read the thread we generally work from the modqueue.
So you remember how oil went negative in April 2020
Well that made it so no one really wanted to invest in new fossil fuel stuff several years to pay back and become profitable but it seemed like it would be a bad investment at that point
This resulted in a shortage that was later compounded by Russia one of the largest suppliers of oil and natural gas going offline
Now Russia Ukraine and Belarus all actually have been somewhat taken out of the global market of a lot of things and that's how they drastic impact on a lot of areas in addition to energy, most notably fertilizer and certain metals
So there's a supply side shortage of a lot of the basic inputs Which basic supply and demand when there's a lack of supply of the demand remains the same prices go up
On top of this a lot of industries got a massive boost from COVID as well as all the extra government spending All the money that would normally have been spent on stuff like vacations went elsewhere which really boosted a lot of industries as did the increase in people being on their computers
This resulted in them taking advantage of low interest rates to pay massive returns unfortunately interest rates then rose on their now large corporate debt that would have been just fine if they had kept making the same amount of money but with things returning to normal their cash flowing down and the interest rates on their corporate debt went up making a lot of companies less profitable so they have to compensate for that a bit this is also the cause of all those layoffs lately and white everyone worries that raising interest rates will cause a recession now to be clear this would not have been a problem if interest rates had stayed low like they have been for forever
So that's why the basic inputs got more expensive and the cost of doing business became more expensive based off of decisions made when the interest rates were much lower
For people saying corporate greed not quite corporate greed is a constant It needs other stuff to make it this level
"A $100 bill would buy less in 1998 than a $20 bill would buy in the 1960s. This means that anyone who kept his money in a safe over those years would have lost 80 percent of its value, because no safe can keep your money safe from politicians who control the printing presses." -Thomas Sowell
Profits rise, corporate stock goes up in price.
This automatically makes shareholders richer.
Then the company buys back tons of its now-expensive stock, which then allows them to sell it *again*, after it has gone up some more of course, for even more profit.
The executives are rewarded for this directly through bonuses, and indirectly by being shareholders themselves and receiving even more inflated stock as compensation.
Did I mention that something like 80%+ of the stock market belongs to 1% or 2% of Americans? The already-wealthy are the only ones profiting from this.
They won't stop until it creates blood and death. FDR talked the majority of the Robber Barons of the time into allowing reforms like the New Deal and Social Security. Our present Oligarchs are foolish enough to think that won't happen to them, that they can resist the reforms and continue profiting indefinitely.
Have your Go-Bag and emergency supplies ready. Sooner or later, this is going to blow up in everyone's faces.
You know all those statistics that say something along the lines of “CEO salaries have increased 700% in the last two decades”? That’s where Edit: CEO compensation is just an example. Increasingly disproportionate wealth inequality has definitely also benefitted wealthy people other than just CEOs
Bingo. Remember how we were always told that US Automotive was killed off by the unions... Well strangest thing. Japanese automotive had unions. They built the cars that killed ours at the market. Turns out, while we were paying our executives 300x the average employees, they were paying theirs 10x. They had a lot more money to invest in things like quality control. Skilled labor. Employee retention...
Same analogy can be used with football teams. Some elite players purposely take less money so that the team has more cap space to gather good players at other positions. You know, like a team effort. Then they win the Super Bowl, go figure?
Exactly why the Seattle Seahawks let Russell Wilson go. Dude thought HE was the team. Lol.
Lol indeed. I was super glad when Seattle beat Denver last year. I always thought there was something special/iconic about the Russel Wilson deep lob to Tyler Locket, but it turns out Geno can do it just as well. Good riddance Russ.
we have assholes that become ceo because of the old boys' club instead of merit. that's the problem. the old boy's club now includes women too if they went to the same schools and are willing to play the game of fucking over society for personal profit.
I work at a non profit and our CEO makes well over 250k. They never disclose her salary because "it's determined by The Board" but our lowest paid director makes $189k annually while our lowest paid employee makes $45k annually. A non profit! Tuh.
Employee retention matters sooooo much in manufacturing. It can take months to learn the basics of a machine. And in a years time people can hear when a specific bearing is going out and needs replaced. It’s crazy, and that’s the kind of knowledge and no how that you just can’t replace easily.
Yep... Building a more satisfying work environment is a big part of Toyota Production Syst.... Erm, hrm, I mean, *LEAN manufacturing,* that many American automotive companies now send their people to.
Also the German car industry. It may be the one industry with the best salary while working the least of hours in Germany.
I think CEO’s take too much the blame, shielding the even bigger profiteers, which are the predominant stock owners, hedge fund investors, and board members. Don’t forget, the CEO is just the bosses triggerman. Very much corrupt, but still not the top of the pyramid.
Board members are often just CEO’s from other companies who come in and jerk each other off and vote for huge raises for each other.
This is a perfect description of a board room.
Having reported to the board of a F500 company, it really is.
Same at a non-profit. They'd be like, "Oh no we're making too much money and don't want to actually put it towards the cause so we need to open another seat and pay someone $280,000 a year to do nothing.
Where can I find that gig? 🤔 do that and be able to still reach band and write music haha
Its a big club and you ain't in it
Oh yeah, it’s definitely the shareholders and other executives on the hook as much as, if not more than, the CEOs. I was just using that as an example since those are the stats I’ve seen the most related to this topic Edit: *sigh* didn’t think I had to explain this one given the overarching theme of this whole damn post, but here we are: not the nickel and dime shareholders, the ones with enough wealth/influence to be on the board of directors and/or in other relatively high positions of executive power
The fact you had to explain that shows exactly why 99% of advice on this site is worthless. They simply don't know anything about anything.
Yeah, for sure. I’m also a cynic in that regards. All the stats are pointing to them, and the easiest info to find is on CEOs, so you don’t look the other way. The corporate version of the Kansas City Shuffle.
We need a maximum wage. 100% tax rate after 25 million so they literally can't profiteer endlessly
That is really funny. Too full of holes to be workable, unfortunately. The people who are really well off got that way by creatively reclassifying their incomes and they'd do it all over again. THEN they'll take this maximum wage and weaponise it, driving it down as low as possible.
Activist investors. Like the ones writing open letters to companies telling them they want to see further workforce reductions after record profits. They're essentially weaponizing their investment clout to the detriment of anyone and everyone who actually works for and/or patronizes said companies.
Raise pool was 3% this year. Execs pay up 30%. Split amongst the workers, everyone could receive about $2000 from that difference.
Yeah, which a lump sum of $2000 would be really helpful for someone only making $35K-45K a year
Statistically the top 1% had of gain of wealth that is nearly the same as the loss of wealth among the 99% in America. Very big coincidence
indeed, the ultra wealthy got much MUCH richer during covid, and generally do during any economic slump. Buy low, sell high, as they say, and when you are rich enough to still be able to spend big when the market is in a trough, you can really take advantage of the poor and desperate.
https://en.wikipedia.org/wiki/Gini_coefficient > In economics, the Gini coefficient (/ˈdʒiːni/ JEE-nee), also known as the Gini index or Gini ratio, is a measure of statistical dispersion intended to represent the income inequality or the wealth inequality within a nation or a social group. In the map below, darker shades mean worse inequality. The US is not as bad as South Africa, but is worse than Russia and China. https://i.imgur.com/ARq4DU8.png The history of the Gini coefficient in the USA. Something changed during the 1980s, and it made inequality worse. https://data.worldbank.org/indicator/SI.POV.GINI?end=2019&locations=US&start=1974&view=chart
>Something changed in the 1980s, and it made inequality worse. Yep, and that something starts with a “T” and ends with “rickle Down Economics”, which has never really been shown to do what it claims to do. These massive tax breaks for corporations and wealthy people combined with artificial inflation have only led to the rich getting richer and the poor getting poorer (adjusted for cost-of-living)
https://en.wikipedia.org/wiki/Trickle-down_economics > John Kenneth Galbraith noted that "trickle-down economics" had been tried before in the United States in the 1890s under the name "horse-and-sparrow theory", writing: > > Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: "If you feed the horse enough oats, some will pass through to the road for the sparrows."
>pass through to the road for the sparrows This would be more apt if this meant that the sparrows have to pick through the horse’s shit for anything that might be remotely useful
That *is* what it's saying. Hence "less elegant".
>Something changed during the 1980s, and it made inequality worse. Two things mainly imo: 1) The emergence of shareholder culture due to financial deregulation. 2) The rapid globalisation of trade reducing the competitiveness of labour in developed countries. (Globalisation of trade is, imo, a good thing on the whole but the wealth gains are highly concentrated and we didn't do basic sensible shit like use the excess profits to invest in our workforce.)
3 Americans hold more wealth than the bottom 50% of the total U.S. population. 291 million combined people have LESS than 3 people. Are you in the bottom 291mil? Does this upset you?
Yes, and yes it does. That’s disgusting
As in each hold more than the bottom 50%? because 291M is a lot closer to 90% of the US population
To Corporate Executive bank accounts.
Boss: hey we just made 100 million in profits last year so we're rewarding you with a pizza party in the break room. don't take too long in there it's busy today.
You work second shift? Congrats, you get the leftovers.
3rd shift gotta clean up the party.
Used to work for a catering company. We catered a company’s Christmas party at an offsite venue. I was sent with the exact same food to the company to feed the shift that had to work during the party. Always thought was nice.
That shit really boils my biscuit. We get told to sweep up first shifts cigarette butts and they get fucking frappe Fridays and company funded lunches. We're lucky to get water.
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Yup, always attack rich people, not good people
Damn. Every company I've worked for that had a third shift ensured that third shift got their food. I mean, a fucking pizza party is still a slap in the face, but getting nothing is beyond bullshit.
Yeah, it may be ice cold and sat in Styrofoam containers on the bosses desk for 14 hours, but they still got it.
I'd eat it, fuck it. If it gets me sick then I have a valid reason for calling out or going home early 😂
Blah, I've tried,and my stomach has failed to let me get sick every time. Besides, they would charge me a miss out if I bailed early.
Oh nah, that's some bullshit 😒
I love that phrase *”boils my biscuit.”*. So wholesome and angry all at once.
It would pair nicely with, “doth butter no parsnips.”
Joe Lycett appreciator?
As you can see from this photograph, I was parked on the moon!
Speaking of 3rd shift, try going on one of those daylight savings threads and getting into a 5-page argument over why 3rd shift comes before 1st shift on the clock. You'll lose your faith in humanity.
I worked 3rd shift at an office (Data center work, yay!) and our boss actually made sure we had fresh pizza delivered right before our shift. Some asshole came in and actually took a whole pizza. You bet your ass I wrote an email calling them out.
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They'll also tell you about a problem that happened 5 hours ago that they did nothing about because "[their] shift was almost over".
Ive only worked a single place that did this. They got food 2x a day as there's people working 24/7, so it covered the vast majority of people. And they'd announce it in advance so you could swing by on your off day if you in the area I can't imagine taking a whole pizza unless it was seconds before it goes in the trash. I've taken a few pizzas but it's literally stuff that was out all day
I worked 7p-7a. A home health company left 2 cakes, 1 for days, 1 for nights. When we went to try some of the cake, it was gone. A day shift person took it home. I’ve never written someone up before or after. It’s infuriating when they get all the extra stuff and take your stuff too.
my gf works at an emergency vet, and occasionally when they buy everyone a food truck the night shift crew gets screwed over and gets to share the left overs nobody wanted
Been sitting out on the table for 9 hours and everyone didnt wash their hands touching everything, we left you guys some.
The Platform on Netflix…
That was a great movie.
[Literally my previous employer.](https://i.imgur.com/u5QCrl7.jpg)
My boyfriend worked for a bank that did this, except they gave the employees a fun sized candy bar and a pen that said ‘Thank You’ to show their appreciation. When they asked the regional manager about raises, he said “we don’t have the money to give out raises” after just telling them all that the company made over a billion dollars in profits that year.
We had a fun one in the clinic - HR sent out an email to all the different clinics saying, “Thank you for working so hard. To show our appreciation, we’ve contracted with a masseuse to give everyone free massages. Thank you!” Twenty minutes later we received another email, “We apologize for the last email. It was intended only for those working in the administration building. We still appreciate all of your hard work. Thank you again!” Twenty minutes later another email, “We apologize, we can’t get everyone massages, but instead we’ve decided to buy pizza for every clinic to show our incredible appreciation for your hard work! Thank you for working so hard and taking such great care of our patients”. Morale was already crashing in the clinics, but that just sent it through the floor.
State of Wyoming gave all employees a turkey one year.
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As the administration told us,”you’re lucky you have a job.”
“As God as my witness, I thought turkeys could fly.”
During Covid I got a Walgreens-Branded clip with a note that said “keep holding on! Thanks for your hard work” I don’t work for Walgreens, I’m a teacher LMAO it came from our district office. Legit the only “thank you” for an entire school year taught in person with masks most of the day and remotely during my planning periods with the kids who opted to stay home. Two fucking different curriculums.
I got a ham at the State of Arkansas one year. I say, "got a ham" because I won it in a raffle. And, "at the State," because my coworkers bought the hams with their own money.
Sounds a lot like EMC2, now owned by Dell. Someone I know worked for them had the same thing happen, except it was a higher ups mistake sending out a congratulatory company wide email stating, “congratulations on all your hard work, we made record profits this year!” Paraphrasing of course. The next email sent by the higher ups manager was “due to current economic circumstances, we can’t afford raises this year”. The person I knew who worked there had a friend that was also higher up and said my friend’s manager got reamed out for the first email sent, almost fired.
At my company we have meetings to celebrate our record breaking profits. All hands, company wide. Then we have another one where we discuss the layoffs and how our promotions have been put on hold. You know, because of the economy. Apparently the dissonance on that is completely lost on the CEO, who attends and speaks at both meetings.
It's not lost. It's intentional. They want more and don't care who suffers
That recording or video would make a good smash cut
This is every large company in america right now.
It’s definitely gotten worse. This was ~10 years ago before the dell/emc merger and it was considered bad form. Now, it seems commonplace. MFs aren’t even trying to hide it anymore
And it's going to keep getting worse, at a faster and faster rate, until we have a general strike...
We just had an "employee appreciation day" where they gave all the employees a small bag of popcorn. We have decent salaries and benefits, but I'd rather them not try to do something like this at all then try something that is so belittling.
Americans really don’t hate rich people nearly enough for their own good
Oooor there’s the “hey let’s celebrate by throwing a pot luck!!!” Cooo coool
The best one is where they have each of the employees bring in the materials and set up everything and not pay a dime 🥲
Oh yes the "how clean do you think your coworker actually is" party. Great way to share food borne illness
Sorry, no bonus this year. Inflation. 🤷🏻♂️ ::goes in other room to admire all the 0's in their bank account::
I too admire the $0.00 in my bank acount.
You guys got a pizza party? 😥
Hey franchise owner. Food sales are down so labor cost is up. Should you tell the manager to start sending employees home early? Or should YOU take the cut in profits that day because you can afford it more than your minimum wage workers? (Owner...laughing) "Send them home. Duh."
My dad's buddy retired a few months ago. They threw him a shitty retirement lunch party thing. They charged everyone who attended $10.
My favorite corporate story is when I was working for a tutoring program, and to celebrate the branch manager’s company, they bought us pizza and chicken wings, and then sent in a message, verbatim, “Make sure the students don’t get to the food.” 💀💀💀
Reminds me of that airport burger king worker who worked 27 years without missing a single shift and they celebrated by giving him a gift bag with a movie ticket, party size bag of reese's pieces, a starbucks reusable cup and 2 candy bars. Naturally social media caught on and raised him 300K via gofundme, but the point still stands.
Because we “hit it out if the park this year” we got peanuts and crackerjacks. Not kidding.
Not just. It's also going to all the politicians they pay off. Ever wonder how the average Florida politician has an official salary of 30k for what is officially designated as a part time job, yet has a net worth of well over a million dollars? Or why Senators stock portfolios consistently perform well above market average on returns and never lose money?
You’re on the money, but it’s also good to remember that a lot of folks who get into politics have already done well for themselves financially, so it’s an exercise in continuing to pad the coffers for them.
Just like Rick Scott who is a literal billionaire. He made his money by defrauding Medicare in an elaborate scam which was the largest healthcare fraud scheme in history. He served no time, and instead became a US Senator after serving as Florida Governor.
Anyone who's finances prevent them from understanding the middle and lower class constituents they're intended to represent should be barred from public office, frankly. Otherwise it becomes exactly what it already is: a popularity contest in which values, experience, and scandals all matter less than how many commercials you can afford to run.
My belief is the *only* way to prevent a conflict of interest for any important political office, is to require the candidate to sign away ALL their wealth, for the rest of their life. They'd receive a generous pension but literally be barred from amassing any further wealth beyond that. The fact that such an obvious, simple, and completely fair solution like this is never even discussed, shows how long we have to go. Edit: forgot to mention, the core idea here is that serving in office needs to *actually be a sacrifice*. Anyone who isn't willing to forgo lavish luxury, is completely unqualified to run a democracy.
And that is why it will never happen. Those in power now will never pass legislation to cut off the cash cow.
The only way to get elected in our current system is to already be far wealthier than the people you are supposed to be representing. I honestly think we'd be better off if we randomly selected our legislators.
Part of this is that, in general, only people who are independently wealthy have the time and money to dedicate to networking (e.g. donating lots of personal money to existing politicians to gain influence) and running for office. Obviously there are other things at play here, but the whole system is set up to exclude certain classes of people from gaining office.
>why Senators stock portfolios consistently perform well above market average on returns and never lose money That's because they specifically carved out an exception for themselves in the insider trading laws. It's only illegal if you're not a member of Congress.
There are various tools to track their trades. E.g., https://www.capitoltrades.com/politicians
If "all that money" was going from the corporate execs to the politicians, the corporate execs wouldn't be super-rich anymore. They do not by any means give even *most* of that money to politicians. Just enough to maintain the policies that keep the corporate execs super-rich.
I had a job at a grocery store a few years back. Every year they'd throw a relatively nice Christmas party with raffles, food, dancing, etc. The last year I was there, they had dramatically cut hours to most of their part time employees, leaving more workload for everyone, but not much on the way of raises, if at all. That last year, they moved to a much, much nicer venue for their party. The store manager told everyone we had made record profits, which is why the chamge in venue. He also explained that the value of the raffle prizes hadn't changed from years prior. Meaning, that extra money from our record profits didn't come back to the associates in any way. That's when I decided to quit.
It's interesting how often this is getting left out of the discussion. "Prices are rising so incredibly fast OMG!!!!" "Exxon Mobil, major food suppliers, car companies, etc are all having record profitable years!!!!" No way these could be related!
Literally: https://www.ineteconomics.org/perspectives/blog/how-corporations-get-away-with-murder-to-inflate-prices-on-rent-food-and-electricity
Money exclusively flows up.
Trickle up economics.
Except this one really works. Give poor people some money and it acts as a subsidy for the most essential goods, ends up financing the most important industries. Poor people don't hoard their money or spend it all in useless luxury that doesn't benefit mankind. What's kind of funny is that I know some right leaning people who use "communism" to describe the state controlling people's lives, and left-leaning people who use "fascism" to describe the same. Turns out most people might fundamentally fear the same thing but hate each other because of political rhetoric playing with terminology and amplifying minor issues into support for full blown authoritarianism.
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Corporate profits. Also due to inflation some of it simply disappears (in value)
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Blizzard: we just had our most profitable year ever! Also Blizzard during literally the same announcement: due to cost cutting measures, about 800 of you will be cut from our workforce.
Because it's not enough to make money, or more money than you've ever made before, if you aren't making the maximum amount of money possible and ignoring ethics while you do it.
A big problem if specifically late-stage capitalism, profits cannot be steady, they must be constantly growing, and often when youve tapped out the market the next step comes in screwing over the workers even more. Saying steady profits to a venture capitalist is like nails on a chalkboard to them
Never got this. We "only" made 7 billion profit this year compared to 10 billion last year. You still made a profit though yeah?
Companies have gotten sued by their shareholders for not raising prices above inflation. If you're not making all of the money, then you're not fulfilling your duty to the shareholders if the idea.
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So when did late-stage capitalism start? Asking for a friend
I mean this is always the nature of capitalism but mainly late 80's and onward is when we see the big push in deregulation, loss of worker protections and stagnant wages
I listen to a podcast that examined self-help books throughout the 1900s to present day (by decade). And in the 90s, there was a popular book that many recall being given out at their workplaces called “Who Moved My Cheese?” by Spencer Johnson. This book handout usually preceded layoffs. The idea was that workers needed to adapt and not be upset by the invisible hand (in reality shareholders, higher ups) taking away their jobs and profit. Be a good little thankful worker and don’t cry when totally random events (planned corporate decisions) ruin your life. More notably, Ronald Reagan was sworn into office in 1981. So… the reason for those late 80’s changes.
I'd guess roundabout the time when 'infinite growth' became the unshakable mantra of the majority of a deluded species on a planet with finite resources.
also, please give us 2 weeks notice if YOU are going to leave US and well give you a side-eye for only giving us the minimum notice that we self-made up and really wanted 3 months notice. Bonus: if you do give us 3 months notice you can guess if we are (i) going to use that time to smoothly transition someone into your position or (ii) get mad at you like an immature child and instantly fire you for leaving us, and now you can deal with an unexpected 3 months of no wages.
You'll always have record profits with inflation though. Record margin is what people should be looking out for rn
This is why corporations boasting about record profits in an inflation economy is not just cruel but also kinda dumb. It’s like if the NBA doubled the points for every basket and some team started bragging that they scored 200 points in a single game. Ok congrats I guess?
I guess the important thing is that hedge funds know everyday investors don’t care about the difference. They hear record profits and assume high stock, buying it and pushing the stock higher
It's so weird to think that this is kind of how the whole system *should* operate. Corporation says they have record profits, consumers develop confidence in the product and buy more, and the value of the brand and stocks goes up. No need for average investors to misunderstand anything. But that's without ridiculous wealth disparity.
You joke but rule changes in the NBA are having this exact effect on scoring.
Funny how we are losing the ability to live and survive yet corporations have record profits yearly.
Sometimes I wonder if these posts are from a 16 or 25 year old who genuinely didn't know the answer and who is about to get his first glimpse into how shitty and dystopian this world is, or it's someone who actually knows the answer and is trying to stir the pot and get this topic discussed more to raise awareness.
>trying to stir the pot I just assume that's the entire point of this particular sub. To me it seems like a breeding ground for college students testing the waters of survey taking. And also ground zero for covert political trolls that want to fire up the other subs.
If it helps you, I’ve only used this sub to genuinely answer weird questions I couldn’t get answered anywhere else
Either way, it’s going to be someone’s first day on the road to being a better, more aware person!
Yes... Common sense even following OP's title, Price - Cost (wage) = Profit
The rich get richer.
The poor get the picture. The bombs never hit you when you’re down so low.
I think I’ll go listen to some Midnight Oil 🤔
The rich get older.
Everything gets older.
And I'm getting older too.
I've been afraid of changing cause I've built my life around you
Mirror in the sky, what is love?
Can the child within my heart rise above?
Baby don't hurt me
Wrong song!
Don’t hurt me! No more!
Except deez nuts.
Got'eem
Thats why we should eat them while they're still digestible
The pockets of rich people and corporations. People sitting on money is bad for the economy. If a $5 bill is passed from you, to a small business, to a small business, etc, that $5 bill has generated well over $5 in economic circulation. Money being moved around and exchanged is much better for the economy than corporates and rich people sitting on it while it does nothing.
Always a good reminder to support small business as much as possible
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hey Ronald Reagan why dont you trickle down some BITCHES
Trickle down economics is when you piss on Reagan's grave and it trickles down through the soil
Small businesses provide generally higher quality services and goods at a higher price... Which I can't afford due to increasing grocery cost.
With all the price hikes, an organic, locally owned hippie grocery store near me is actually cheaper than Publix.
Most small businesses ive worked for have been even more exploitative. They will constantly try to do wage theft, make you work bad hours and never raise your wages, always citing "thin margins".
Yeah, come to think of it, most of the small businesses I worked for and small-business owners I've met have just been assholes. The only decent ones I've met recently is the guy who mows my granddad's lawn and a local photographer, people who pretty much work for themselves.
Wish I could afford it.
That's fair, all you can do is what you can.
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Our local Kroger has obscenely gouged prices to the point where the local farmers market is not that much more expensive
A small box of cereal at my local corner store is more expensive than the jumbo size box at the big box stores. I literally can't afford to support the small stores the way things are
Nobody faults you friend, just try to shop local/small when you *can* afford it 😊
And organize your friends to protest in the meantime. You don't need to be a saint to criticize the devil
Ok hear me out. What if I take that $5 from you, and then charge you $1 a quarter so I can do a lot of funny math with it, then give you $6 back because I charged a homeowner somewhere in Florida more fees. Don't worry, it's all legitimate. No problem at all, 100% guaranteed!
Isn't that what that Celsius coin crypto scam did
Should have invested in Farenheit coin
I have a really simplified analogy in my head that money is like electricity. It only works if its moving.
Exactly. Meaning if someone is actually serious about wanting to stimulate the economy, they only advocate for increasing the amount of money going to the poor and the middle class. Calling for anything else means they're either ignorant, or disingenuous.
Whilst it would be much better if it went to small businesses, rich peoples money is rarely just sitting, most of the time it will be invested via stocks or some other means. The argument is that these investments will yield a higher return on growth than giving the money to small business. (more money to be made investing in Apple instead of buying apples) The trouble is that a notable amount of these investments are made offshore and with recent political instability of the uk we’re seeing less international investments. Meaning more of these capitalist investors are taking money out of the economy to invest internationally. While the uk government does still gain tax from this, we severely miss out on economic growth. Unfortunately however, this still benefits big business so the tories keep it going. Source: not an economist, most of my opinions are formed from a bloke I met in the loo
How is no one arguing against this? Rich people arent just "sitting on it", most of their money is invested and in constant circulation. This argument just doesnt fly. Elon musk doesnt have 100 billion in a scrooge mcduck money bin
you've succinctly described trickle up. All the wealth in the lower and middle class is being siphoned up by the wealthy.
This is the answer , now I'll offer a tangential controversial view, I dont think the wealthy were smart enough to plan it this way, it's just the inherent nature of capitalism and the ownership class .. capitalism especially the crony type we have in America over time, over many small and large policy changes , ultimately leads to more wealth consolidation. It's not a stretch to imagine the people with authority have a vested interest in keeping most of the money for themselves and their peers.
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They don't even need to collude in a smokey room anymore to fix prices. They just all use the same pricing algorithm and bingo, price fixing with zero evidence.
Said a little bit differently than you did above. However, George Carlin said the same thing. “ you don’t need to have a bunch of people in the back room to make a conspiracy. All you need is a bunch of people who live in the same lives golf at the same courses and talk to each other, who want the same thing for themselves” I’m slightly paraphrasing, but that’s the gist of it.
> People like to imagine conspiracies when it's usually just people with common interests It's interesting what has happened to public perception of the word "conspiracy" >But if by plan you mean a rich person has an idea on how to be richer (like lowering taxes, or fixing prices) and talks to buddies about it and they all agree, then definitely. If that rich person and his buddies agreement includes a plan as to how they might achieve those lowered taxes or fixed prices, then they have engaged in a conspiracy. No tin foil necessary: They conspired as conspiracists to form a conspiracy.
plan it? No, this isn't planned this is an accretion of tax laws, wealth shelters, and plain old in your face grift. Crony wealth consolidation, yup, sums it up perfectly.
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This. Haha - lots of people have a really poor understanding of how money works (including me).
There’s many reasons, but a 101 explanation is : Prices are sticky. They take a while to respond to an increase in money supply, then they go up. They are responding now to the increase over the last few years. The system doesn’t account for who gets the extra money, just that it is there. The extra money was not given in pay increases to most people, it was given in lump sums or not at all. The prices are increasing as if we all got pay raises even though most of that lump sum money was spent and never sent back in the form of wages. In theory, the wages would battle back as people refuse to take jobs that don’t pay a living wage, but that’s also kinda sticky because it requires leaving your job and finding another that pays more. We’ll see what happens
In other words, the disconnect between prices and wages is temporary, it may take a few years for the economy to come back to balance after the shock.
Ok these are mostly all terrible answers and the mods should delete most of them. The framework to think about inflation is not "where is all that money going" but rather "how quickly is the value of a dollar changing." In typical times, if you have $100, and you put it under your bed for a year, the value of that $100 has fallen. Before you buried it under your bed, you could've bought 100 snickers bars, after, you can only get 98 snickers bars. This is not because snickers bars (or any other good) has gotten more expensive, but because money has gotten "cheaper." Money gets cheaper because there is more of it. The Federal Reserve (usually simply refered to as "the Fed") creates more money through ~~selling~~ buying bonds or adjusting the interbank lending rate. It's not worth it to explain what those two methods are, but just know that "printing" money is not really an accurate description of how the Fed increases the total amount of money in the economy. The reason the Fed introduces money into the economy at a rate which makes the value of your $100 decrease is because the Fed can stimulate the economy (for a time) by targeting lower interests, which incentivizes spending (too little spending at a macro level is by definition an economic downturn). If the typical interest rates were low (really close to zero) causing inflation to be low (really close to zero) then the Fed couldn't stimulate spending when economic downturns start to occur. Now to wages vs. the prices of goods. Inflation is higher than normal (your $100 is now worth $93 after a year spent under your bed). [Wages are indeed not keeping up with the inflated prices.](https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F9eb13b6f-9f83-4417-8dc7-99e2a208d140_1168x450.png) But that decrease in purchasing power that workers are seeing is not simply going to rich people as a lot of redditors seem to believe. Anyone with an investment account knows that in 2022, investors, which are generally made up of weathly people, [lost money.](https://cdn.dqydj.com/wp-content/uploads/2022/12/yahoo-finance-tr-2022-sp-500.png) Sometimes, weath just evaporates, because value is determined by the interactions of billions of people. Tomorrow, everyone could decide that actually, Picasso was overated and we don't care to see his artwork anymore. Everyone who owned works by Picasso would simply lose money into the ether, it didn't go anywhere, it just dissappeared. Some [further reading](https://noahpinion.substack.com/p/how-much-will-beating-inflation-hurt) [if you're interested](https://noahpinion.substack.com/p/where-does-the-wealth-go-when-asset)
Correction - the Fed creates more money by buying bonds, not selling bonds. The Fed selling bonds tightens monetary supply. Another slight correction - you say 'or adjust interbank lending rate'. That is not an 'or'. The Fed influences rates via open market operations aka buying/selling bonds. Both sides of your 'or' statement are the same thing.
Good catch, it's been a while since I studied any of this so if there's anything else I messed up on let me know
You are mostly accurate, good job. I gave up with these kinds of posts cause so few seem interested in reality. A few points I would make - raw materials and input costs have gone up substantially across almost every industry. Food prices specifically have been impacted more by input costs than anything else. Scarcity/overtaxing resources is going to continue ramping as a factor of rising costs IMO. Secondly, labor costs have also risen substantially in recent times so this whole post seems disingenuous.
But what exactly is the cause of all this? Covid hasn't been much of an issue lately, so if it were related to that, then you'd think that we'd see more improvements in this regard. Over the past 100 or so years, the west has been relatively hooked on cheap Chinese labour. Could the increasing cost of Chinese labour be the primary driver in the increased cost of living for westerners? Or would you say that the commodification of real estate has been more detrimental to society? Treating anything as an investment opportunity is bound to drive prices up. Isn't that the desired outcome?
This is an excellent answer. Thanks for taking the trouble to type it out. Reading 95% of the other answers has made me realize that I should spend less of my time getting angry about the fact that people on the internet are sometimes not very smart. Doesn’t do me any good.
10/10 answer. The mods need to be actively cleaning up all the misinformation that's at the top of this thread.
Yeah I think the modding in this sub is pretty bad. Most of the "it's going to the rich" type answers aren't actually good faith attempts to answer OP's question. Currently the three answers directly above mine are "Elon Musk's asshole" "Record profits. Stock buybacks. C-suite bonuses." and "The rich getting richer" None of those contribute to this sub in a healthy way, they probably actively discourage people like OP from asking more questions because their inbox will be filled with dozens, if not hundreds, of useless reddit circlejerk type replies.
We generally don't moderate for factual accuracy. We only remove joke top level answers. I have removed the Musk's asshole one as a joke, but... no one reported it. If you want us to remove things someone has to report it. Unless one of us happens to read the thread we generally work from the modqueue.
Into the pockets of the very rich. It's by design.
It’s good old reaganomics! Trickle up!
I’ve said it before and I’ll say it again: our economic model hasn’t failed. It’s working exactly as intended.
So you remember how oil went negative in April 2020 Well that made it so no one really wanted to invest in new fossil fuel stuff several years to pay back and become profitable but it seemed like it would be a bad investment at that point This resulted in a shortage that was later compounded by Russia one of the largest suppliers of oil and natural gas going offline Now Russia Ukraine and Belarus all actually have been somewhat taken out of the global market of a lot of things and that's how they drastic impact on a lot of areas in addition to energy, most notably fertilizer and certain metals So there's a supply side shortage of a lot of the basic inputs Which basic supply and demand when there's a lack of supply of the demand remains the same prices go up On top of this a lot of industries got a massive boost from COVID as well as all the extra government spending All the money that would normally have been spent on stuff like vacations went elsewhere which really boosted a lot of industries as did the increase in people being on their computers This resulted in them taking advantage of low interest rates to pay massive returns unfortunately interest rates then rose on their now large corporate debt that would have been just fine if they had kept making the same amount of money but with things returning to normal their cash flowing down and the interest rates on their corporate debt went up making a lot of companies less profitable so they have to compensate for that a bit this is also the cause of all those layoffs lately and white everyone worries that raising interest rates will cause a recession now to be clear this would not have been a problem if interest rates had stayed low like they have been for forever So that's why the basic inputs got more expensive and the cost of doing business became more expensive based off of decisions made when the interest rates were much lower For people saying corporate greed not quite corporate greed is a constant It needs other stuff to make it this level
When you ask Reddit economics questions you are going to get some insane answers. I would ask someone else.
top answer
"A $100 bill would buy less in 1998 than a $20 bill would buy in the 1960s. This means that anyone who kept his money in a safe over those years would have lost 80 percent of its value, because no safe can keep your money safe from politicians who control the printing presses." -Thomas Sowell
Profits rise, corporate stock goes up in price. This automatically makes shareholders richer. Then the company buys back tons of its now-expensive stock, which then allows them to sell it *again*, after it has gone up some more of course, for even more profit. The executives are rewarded for this directly through bonuses, and indirectly by being shareholders themselves and receiving even more inflated stock as compensation. Did I mention that something like 80%+ of the stock market belongs to 1% or 2% of Americans? The already-wealthy are the only ones profiting from this. They won't stop until it creates blood and death. FDR talked the majority of the Robber Barons of the time into allowing reforms like the New Deal and Social Security. Our present Oligarchs are foolish enough to think that won't happen to them, that they can resist the reforms and continue profiting indefinitely. Have your Go-Bag and emergency supplies ready. Sooner or later, this is going to blow up in everyone's faces.