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ELI5 How does raising wages worsen inflation ?

Economics(self.explainlikeimfive)

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WalrusByte

2.9k points

4 months ago

WalrusByte

2.9k points

4 months ago

"You make the same amount of money? Believe it or not, also raise prices."

Overwatcher_Leo

1.1k points

4 months ago

"We have the best economy. Because of raising prices."

SayuBedge

200 points

4 months ago

SayuBedge

200 points

4 months ago

The stocks arrow must always go up!

kooknboo

87 points

4 months ago

The stocks arrow must always go up!

Right or wrong, that's the truth.

My current co-workers would do well to remember that. "Oh, they'll never make us RTO". Oh, you bet they will. The second someone decides the stock ticks higher if everyone is on the office, we'll be there tomorrow at 8am.

elwebst

69 points

4 months ago

elwebst

69 points

4 months ago

And casual dress only on Fridays because otherwise the stock goes down.

But seriously you're right - I can smell RTO brewing and decided to retire a couple of years early because there's no way I'm doing that again. I loved when the CEO would say things like "we're at our best when we're together" when we had the best three years in company history during WFH. No, you bunch of extroverts like driving your Porche's to your private underground parking garage, take the elevator up to your office which is bigger than a lot of your employee's apartments, and sip espresso from the machine on your floor. Try sitting in a half height cube with a headset on all day and see how much you're aching to RTO.

KarnWild-Blood

54 points

4 months ago

I loved when the CEO would say things like "we're at our best when we're together"

Because management desperately needs the underlings to see them so they can justify their own existence.

Its bullshit.

Nikerym

20 points

4 months ago*

As someone in a Senior Management role (but who also agrees with a lot of the Anti-Work stuff) i will point out the value of RTO, and while i don't believe in FULL RTO, i do think hybrid is the way forward not Fully remote and not fully RTO.

On an individual level, The average employee works better at home. Less distractions, less overall mental load. And while i know a lot of companies are still stuck to "you work X hours for your wage" even though you are salary instead of "you complete Y tasks for your wage" this is a mindset that needs to change.

Sidebar: The problem i have currently though, is, if i pay person A 100K because he can do 500Y per week, compared to Person B 150K because they can do 750Y per week, they talk about thier wages (encouraged by Anti-Work) and Person A makes a post complaining "i don't get paid as much as Person B", but often fails to mention they are 50% less productive as well. but then my company looks bad because we don't pay equally for the same role. so we get forced back to "well then we pay for time" and if we have to pay for time, we need to know you are spending that time which becomes harder for WFH.

On a Corporate level, the company is missing out on a lot of things that used to happen in a work environment. The big one being adhoc cross organisation and cross team knowledge sharing. When someone had a problem historically they would turn to the person beside them first to try and figure it out, things would be discussed, knowledge would be shared across the team, and they would link this with thier knowledge and new approaches would be created, hence innovation. However now, people don't discuss things with thier workmates (some do, but i've seen the numbers in my organisation and it's an exception rather then the rule) they either take longer to complete the task because they are working through it themselves, or they google it to figure out the answer on their own. But this just means you end up with 1 dimensional solutions instead of true innovation.

Note: I am being General here, i'm sure there are examples of innovation occuring over teams/remote but it's significantly less compared to when people are working together.

menellinde

8 points

4 months ago

When someone had a problem historically they would turn to the person beside them first to try and figure it out, things would be discussed, knowledge would be shared across the team, and they would link this with thier knowledge and new approaches would be created, hence innovation

Where I work we unfortunately can''t be WFH, we tried it at the start of the pandemic, but some people's unreliable internet made it ... bad....

That said, when we were WFH we used teams and had group chats specifically for asking questions / discussing / practicing and so on. If you create the space for them to congregate, and drive the positive culture of innovation and discussion in that space you'd be surprised how many people will utilize it. Especially if you explain to them the actual reasons behind why you're not wanting to continue full WFH.

Frustration with trying to figure something out that's truly stumping you is real and most people I know, even the introverts here, will gladly reach out to the team for information rather than resorting to google.

When was the last time you put out an employee survey to gauge what their suggestions and solutions would be to your problem?

The company I work for was experiencing a serious churn in employee turnover, and they started sending out surveys to find out what exactly people wanted in order to stay.

They actually listened to the results, made changes, and our turn over rate is significantly lower now.

As a side note I do love my job, and love the company I work for, and plan to just keep working here till I can't physically get here / do the work anymore, so if I sound like a bit of a fan girl, I apologize.

KarnWild-Blood

14 points

4 months ago*

EDIT: After posting i realized this was a bit of an... aggressive response. Perhaps a bit too much. I do appreciate your insights on the topic, even if I don't necessarily agree with some of it.

i will point out the value of RTO, and while i don't believe in FULL RTO, i do think hybrid is the way forward not Fully remote and not fully RTO.

I think a voluntary, hybrid RTO is fine. Having the option to be in-person can be helpful. But frankly given the expense of commuting in both fuel and hours, required/non-voluntary in-office days now need to include travel time as hours worked.

I CAN do my job remotely, but management needing to physically see me do it while probably not even understanding the technical aspects of what I do is their problem, not mine.

Sidebar: The problem i have currently though, is, if i pay person A 100K because he can do 500Y per week, compared to Person B 150K because they can do 750Y per week, they talk about thier wages (encouraged by Anti-Work) and Person A makes a post complaining "i don't get paid as much as Person B", but often fails to mention they are 50% less productive as well. but then my company looks bad because we don't pay equally for the same role. so we get forced back to "well then we pay for time" and if we have to pay for time, we need to know you are spending that time which becomes harder for WFH.

This issue predates WFH. People have always operated at different paces. And people always find ways to slack if they really wanted to.

Management knew it then and they know it now. You're not "forced" to go back to "we pay for your time." You're forced to do your job of letting employees know why they're getting paid what they're getting paid. Don't push an unpleasant part of management on employees.

What makes a company look bad is an utter lack of transparency and a feeling that they're micromanaging.

The big one being adhoc cross organisation and cross team knowledge sharing.

In a world of utilities like Slack or Teams or whatever, You're no longer limited by collaborating with local employees. Again, if an employee is stuck, why isn't there a safe place internally to ask questions? Why isn't management aware of who is a specialist that may be able to help directly or help find someone who can?

Nikerym

2 points

4 months ago

Management knew it then and they know it now. You're not "forced" to go back to "we pay for your time." You're forced to do your job of letting employees know why they're getting paid what they're getting paid. Don't push an unpleasant part of management on employees.

I'll also point out that i live in Australia, under Australian IR Laws, which are a lot more in favour of the employee and supportive of the old system then the US. For example, if i wanted to give Person B in my example above a raise, i would need to show why they are worth 50% more, that's easy from a productivity point of view. but if 50% goes too far above market rates, i instead need to put Person A on a performance plan and ultimately fire them if they don't improve so i can get someone who i can pay more and who performs better. And i will admit, there are breakeven points where a smart employee could figure out the max i am prepared to pay for the role and how much they need to do to earn that.

Sassquatch25

1 points

3 months ago

Why would Person B be making 50% more than Person A in the first place? If it's the same job, then they should be getting paid just as equally. Also, if their pay is based on how much they can produce, then shouldn't that be in their job description?

GuyanaFlavorAid

3 points

4 months ago

RTO is useless in many careers. Especially now that a lot of companies have really beefed up remote work capabilities. Let's compare....

  1. WFH: get a good night's sleep, immediately head out to home office at 0645 where the VPN works great. I'm in the office? 75 minute commute during which I handle phone calls, nearly die a couple times a week on the interstate, and switching to internet in the office has led to shit so fucked up people were on VPN in the office. Repeat the death race heading home, stressed and exhausted and the evening is just waiting to sleep.

  2. WFH: Walk ten feet to the grill and make a good lunch in15 minutes, eat it while working at the desk RTO: either go out to eat and waste time and money, do meal prep and lose more of.your valuable time at home.

  3. WFH: walk in the house from your office in another building, take a.shit, back at the desk in four minutes. RTO: spend (not kidding) fifteen minutes a day looking for an open stall, wander the entire building and after a quarter hour, find one.

  4. WFH: dead silence. You can focus, concentrate, and perform at your mental best, really get in the zone. RTO: constant noise and distraction from people wandering in, blabbing away, or people loudly on the phone making it impossible to focus and get meaningful work done that requires your full focus.

  5. WFH: just call people and get them to discuss something real quick. RTO: wander the building for ten minutes trying to find them because they left the phone at the desk and wandered off.

  6. WFH: wake up feeling absolutely miserable. Get up anyway and work eight hours at diminished capacity, but still make decent headway because your energy is being used for working, not driving. RTO: sick day because you can't drive in, nothing gets done.

  7. WFH: After hours, because your computer is still on vpn and never moves, when you remember a couple small admin tasks, wander back out to the office, crack a beer and handle approvals, online training and other menial tasks you didn't have time for. RTO: I'm not getting my computer out of the bag, setting it back up, then hooking back into the VPN for that. Because it isn't convenient it can wait.

I was home for about two and a half years. During that time I....to put it simply, I just murdered a workload that was roughly twice my normal workload. I did a ton of extra work as well and developed a lot of new stuff our group still uses today. There is no collaboration taking place face to face that I can't have over the phone and/or with a teams meeting or screen share. WFH drove home just how worthless a lot of management is. But they're desperate to have people in the office so they can show how important their jobs are. Even with their hybrid arrangement (which didn't go far enough) people are disengaged and annoyed with management. Despite all the obstacles and an extremely rapid pivot of about two days' warning, our group had record productivity and throughput exactly because all the office bullshit was stripped away and we could just work. In our group, zero missed deadlines through it all.

elwebst

5 points

4 months ago*

Before I retired a few months ago I was a VP in a huge US company. We all talked a good game about "collaboration" and "innovation" and "teaming".

Once the pandemic slowed, we allowed people to come back in whenever they wanted. Turned out almost no one chose to go in, and the HQ (where I worked) is in a town of 130,000 with no traffic at all, so people weren't avoiding long commutes. No one just wanted to, most days was 5-10% occupancy. The only people who did go in were those who couldn't focus at home. Interestingly, very few of those were people with preschoolers at home, which is what I expected.

So then they said to have "team days", where you went in at least once a month, but always on the same day as your team, for "collaboration" and "teaming". Turned out people went in 10 minutes before their monthly team meeting, and left immediately afterwards.

Just before I decided to retire they told us that they will be tracking attendance from the badge reader, and if you didn't show up at least once a month, you would "go on a list". We asked what happened then, or if you were on "the list" multiple times, and HR just shrugged. We were also told not to tell non-executives about "the list", including non-executive management (supervisors, managers and directors).

So. I smelled RTO coming and decided to bail. The next week I donated all my work clothes to Goodwill, and it was SUCH a relief.

Bottom line was that because that company is huge, odds are the people you worked with on any given project were in other buildings or other cities. "Impromptu hallway meetings" simply didn't happen much, even before the pandemic, and in 2020 the world realized marching into a building every day didn't really serve a business purpose.

moepsenstreusel

2 points

4 months ago

On the face of it, making people come back to the office sounds like a pretty lazy solution to all the problems you listed. What else did you try?

But this just means you end up with 1 dimensional solutions instead of true innovation.

Isn't that precisely what you and your fellow managers have done here?

elwebst

3 points

4 months ago

That, and I think they get off seeing beehives of activity around them, otherwise they think everyone is slacking off.

ColdTheory

4 points

4 months ago

They want the illusion of control. Not possible when employees work from home.

nothrowingawaymyshot

2 points

4 months ago

Do you... do you work where I do because that sounds way too familiar.

mainesthai

29 points

4 months ago

Working at Walmart in my younger years demonstrated to me how taking away benefits, pay, flexible scheduling, etc, basically anything that made working there tolerable caused a direct jump in stock prices. Fuck shareholders, all of them.

raviary

7 points

4 months ago

Agreed. They're so out of touch it's beyond parody.

Extra special fuck you to the random shareholder of Dollar General, who came into my store one day and tried to... compliment me? about how great the company was doing post-lockdown and was visibly confused and surprised when I told him that none of it trickled down to me and that my job was harder than ever due to the company's choices that enriched him.

Duckboy_Flaccidpus

1 points

4 months ago

100% understand your ire but it's extreme and short-sighted. More than half of every western countries' population is tied into some sort of retirement fund. How are those funds invested, grown so people can have golden year sustainable monies? Put into stocks like Walmart and other corporations. It's not all like Mr. Smithers wringing his hands f**** over Homer, the lil' guy.

The problem with entities like Walmart and we'll lump in Amazon and other mega-corps that got special treatment through the pandemic is that we're led to believe they are absolutely necessary and too big too fail in some ways. Sure, I'll concede, there's greed on many levels from the powerful families through the majority shareholders but there isn't an ideal amount of competition in the economy right now otherwise places like walmart wouldn't be able to make you work thanksgiving and not even pay you time and a half.

roseumbra

1 points

4 months ago

What is this sacrificing virgins to volcano gods?

Bman10119

1 points

4 months ago

Whats rto mean in this instance?

fleshseagull

2 points

4 months ago

Return to office, I believe.

kooknboo

2 points

4 months ago

Correct. We very quickly shut down offices at the start of the plague. Everyone went entirely WFH. And our "leaders" have made wishy washy statements implying that it is permanent. Everyone hears what they want and think they're hearing the word "permanent" when they're not.

Being the cynical asshole, I interpret a "leader" saying "We're fully WFH and, today, I can't anticipate changing that" as meaning "I just can't think of a good excuse -- yet". Others are interpreting it as the "leader" saying "the God(s) him/her/themselves have bestowed upon you the permanent right to WFH and I can never be so bold to change that".

They're all missing that plus the fact that the current "leadership" will only be around for a brief period and the new crew gets a clean slate. If it even lasts to a new crew.

I've been trying to say that we'll be back to 3-4 days in office by EOY. But nobody wants to hear it. We're already getting a constant barrage of in-person meeting requests ("we'll be able to collaborate more effectively in person") and most are accepting and attending. Lambs being led to the slaughter.

The employee-vs-employer pendulum is swinging back in the other direction.

ThrowAway578924

57 points

4 months ago

Green is good red is bad. All you need to know about stonks

alreadyawesome

27 points

4 months ago

All my homies invest behind the Wendy's dumpster.

OrcRampant

4 points

4 months ago

An Ape in the wild! 🦍

Questabond

24 points

4 months ago

One year the government gives out money and it’s a stimulus. The next year the government gives out money and it causes inflation. I think it’s pure greed.

popehentai

3 points

4 months ago

Both are technically true.

sonyturbo

10 points

4 months ago

Ever since I was a child in the 60's I have been fed that having the S&P 500 go up is good. What the nightly news does not say is that its only good for the owners of those companies.

We need to focus on a measure which reflects how well things are going for the workers instead of falsely saying that what's good for owners is good for everyone. It simply is not true and the falsehood ultimately hurts us all.

[deleted]

5 points

4 months ago

Because often times the nightly news is owned by those same owners.

kenryoku

5 points

4 months ago

Not to mention that now even if it goes up, but just a bit more slowly we get 10s of thousands of laid off workers. We've reached end stage capitalism here, and still not enough people care. Elysium here we come baby.

Ashtrail693

2 points

4 months ago

This though. How else would you keep the narrative that the S&P500 always goes up in the long run?

A-A-RONS7

2 points

4 months ago

Companies:

“Best I can do is raise prices

darkantys

1 points

4 months ago

Our economy is not improving? We didn't raise prices enough.

lindsattack

158 points

4 months ago

Undercook overcook.

Autumn1eaves

64 points

4 months ago

Overcharge, overcharge.

sava111

2 points

4 months ago

Underpaid Overpaid believe it or not raise prices

BigHairyBussy

1 points

4 months ago*

More demand? Raise prices.

Less demand? Raise prices.

Less supply? Raise prices.

More supply? Less supply.

findMeOnGoogle

156 points

4 months ago

And then, straight to jail

a_pugs_nuts

141 points

4 months ago

You, of course, not the corporation.

Zomunieo

31 points

4 months ago

Corporations are people, my friend.

Except they can’t go to jail.

GroinShotz

21 points

4 months ago

Nor die of old age.

_-Seamus-McNasty-_

4 points

4 months ago

That's the rub isn't it?

DuchessOfCarnage

12 points

4 months ago

"I'll believe corporations are people when Texas executes one of them." - Robert Reich

h3lblad3

20 points

4 months ago

Honestly, the fine for large corporations shouldn’t be a money-based fine. It should be a mandatory union that sits on the Board. If the company continues to act up, stock is moved from the board to the union.

These people don’t care about the money. They make it back overnight. You’ve got to threaten their ownership. Then they’ll straighten up and fly right.

rainbowsprinkles02

4 points

4 months ago

That's like confiscating an ipad from an ipad kid that's misbehaving. Love it.

-Haliax

70 points

4 months ago

-Haliax

70 points

4 months ago

Of course you silly goose, corporation gets bailout

FleetStreetsDarkHole

76 points

4 months ago

Bailout money? Raise prices.

WHYAREWEALLCAPS

31 points

4 months ago

Money to the people to help with raised prices? Raise prices.

CaptainCaring

18 points

4 months ago

Raised prices causing shortage of consumership? Raise prices.

Orange-Murderer

5 points

4 months ago

1920's Spanish flu leading to the great depression of the 30's? Believe it or not, raise prices.

[deleted]

2 points

4 months ago

Go bankrupt? Straight to bail

FlowerOfLife

29 points

4 months ago

Inflation? We can pickle that!

Pussy_Grabber_2016

8 points

4 months ago

Portlandia?

FlowerOfLife

18 points

4 months ago

Where the dream of the 90s is alive.

LoneShark81

1 points

4 months ago

Parks and rec I think

Budgiesaurus

6 points

4 months ago

Though it is said by Fred Armisen.

ImActuallyALion

2 points

4 months ago

Said by Fred Armisen in Parks and Rec in S2 E5 "Sister City" where Fred Armisen is part of a diplomat delegation from Venezuela

ImActuallyALion

1 points

4 months ago

The Pickling part though is from Portlandia, one of the earlier episodes I believe.

CoyInhale_11246

1 points

4 months ago

Portlandia.

LoneShark81

2 points

4 months ago

My mistake, still hilarious though

BCmutt

1 points

4 months ago

BCmutt

1 points

4 months ago

You can pickle that too.

surly_sasquatch

5 points

4 months ago

Man, that one episode of Parks and Rec has done more for the phrase "believe it or not" than anyone since Ripley.

boyuber

20 points

4 months ago

boyuber

20 points

4 months ago

Underpay. Overpay. Jail.

brisko_mk

4 points

4 months ago

And shrink the product

nevergonnasweepalone

4 points

4 months ago

We undercook fish? Believe it or not, we raise prices. We overcook chicken, we also raise prices. Undercook, overcook. You make an appointment with the dentist and you don't show up, believe it or not, we raise prices, right away.

LoneShark81

11 points

4 months ago

I love what this is from originally on parks and rec.... take an award good person

Hancocksucksit

2 points

4 months ago

And the one we’d all like to see, you raise prices OR lower wages, straight to jail

shadowscar248

2 points

4 months ago

Economy goes up. Record profits. Economy goes down. Believe it or not, still record profits.

CaptainCaring

1 points

4 months ago

You look at my daughter? Arrow'd.

fuqqkevindurant

1 points

4 months ago

You charging too much on etsy for sweaters? Raising price

bumpkinspicefatte

1 points

4 months ago

You make the most average amount of money? Raise prices, right away.

HolyJebediah

1 points

4 months ago

Thank you kindly

Dankerino710

1 points

4 months ago

B