Sad, dirty secret of why US inflation is at 7.9%

There are many reasons why inflation is roaring ahead. They include policy mistakes and complacency, energy price rises and then there are three of the four horsemen of the apocalypse: pestilence, famine (The UN’s food price index has already risen by 24% from a year ago and is set to rise further.) and war.

But the main reason is the shortage of lowest paid workers.

And lowest paid workers are now getting big pay increases in the US.

The Hardest Truth of economics is that productivity must grow in line with this wage increase in order to keep inflation in check. But the signs are that this is not happening, and won’t happen. And neither is the supply of workers increasing.

It is likely, therefore, that in America and elsewhere labour markets will have to be cooled the old-fashioned way: by central banks raising interest rates, making it a little more attractive to save than spend and thereby choking off demand for labour. The Fed has already raised rates by 0.25 percentage points, and is expected to raise them by a total of 2.5 points this year. America may well prove an example of what happens when policymakers respond to a labour market that has become dangerously hot.

https://www.economist.com/finance-and-economics/are-labour-markets-in-the-rich-world-too-tight/21808579

The poor have to be satisfied with this promise by Jesus:

Blessed be ye poor: for your’s is the kingdom of God.

Extract from Luke 6:20-21 

But in S’pore, the PAP govt makes sure that there are FTs by the cattle-truck load to ensure that wages remain low. At least that’s what retirees like me should hope happens, what with our millionaire ministers saying die, die must increase GST.

Ingrates like me who don’t for the PAP must remember that we, the well off, get almost first world service and quality while paying (indirectly) third world wages. The plebs who die die vote for the PAP, save us from having to vote for the PAP.