Wages and Panic Buttons

oudies at flash.net oudies at flash.net
Thu Aug 5 14:57:14 PDT 1999

maybe but the chains do things like promo loss leaders in order to get you into the store so you'll buy things you already had on your list and, with any luck, you'll buy gadgetoids you didn't know you needed. mostly men do the last one, coz they're HUGE suckers.

say, greg, how's the price of mustard, pickle relish and olive oil doing?

At 05:03 PM 8/5/1999 -0400, you wrote:
>Ellen, speaking of pricing power or price gouging. This afternoon I stopped
>at NAPA a large auto parts chain for a few things. One of the things I
>to buy was a can of acetone solvent. I asked the price of a can of acetone,
>the guy told me $ 7.49. I laughed at him and left. I went down the road to
>another parts joint and bought the same size can of acetone for $2.79! I
>could probably even buy it cheaper. Greed is a big cause of inflation!
>Tom Lehman
>Ellen Frank wrote:
>> >
>> Doug writes:
>> >
>> >Between 1997 and 1998, union members had an average weekly wage
>> >increase of 3.0%, vs. 4.4% for nonunion workers. I suspect that's a
>> >reflection of a higher unionization rate in manufacturing, where the
>> >real wage is virtually flat; for the last two years or so, private
>> >service workers have seen real hourly wage increases in the 2-3%
>> >range, despite low union density. Obviously this service
>> >outperformance is a function of tight labor markets without
>> >significant import competition.
>> What I meant is that the weakness of unions in general (along with
>> other institutions like contractual raises) has made it difficult to
>> bargain for real wage increases without productivity increases.
>> The old radical inflation story goes that inflation is caused by
>> conflict over income distribution that can't be resolved politically and
>> is displaced into the economic arena. When unions are strong
>> and/or labor markets are tight, workers try to resist
>> real declines in income (rising oil prices for example) by
>> using institutional power to increase nominal wages. But of
>> course employers do the same thing, as does every other
>> organized group with some pricing power. Often wages
>> fall in real terms. The impact is often uneven, depending
>> on the strength of wage-setting instituions. Tight labor markets are
>> an important part of this story in the US. In some South American
>> countries though inflation gets going at very high rates of unemployment
>> simply because of powerful institutions with pricing power.
>> >
>> >
>> >In the U.S., debt substitutes for the social wage. Free tuition! Free
>> >healthcare!
>> You're right. Limit the cash economy and we limit the power of wealth.
>> >
>> >
>> >
>> >I think it'd be more productive to talk about the tightness or slack
>> >in labor markets than about inflation. That's what Wall Street means
>> >by inflation - the balance of class power. That's what Greenspan
>> >means when he's talking about the dwindling supply of new workers.
>> >
>> But the question remains. What if BLS announced a 0.5% CPI increase for
>> July? What's the liberal-progressive line? In arguing against NAIRU,
>> a number of people have essentially said - the Fed shouldn't tighten
>> because rising wages doesn't lead to inflation. But what if it did? Does
>> that
>> mean the Fed SHOULD tighten? I'm not accusing you of painting
>> yourself into this rhetorical corner, Doug, but some prominent
>> commentators have.
>> Ellen
>> >

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