Economic Turmoil: The Silent Suffering of Workers Amidst Inflation
In a world where essential goods become unaffordable, the working class grapples with the harsh realities of inflation, risking their livelihoods and future stability
The Ravages of Inflation: A Worker's Nightmare
In the relentless march of time, American workers find themselves caught in an ever-tightening vise of economic pressure. The culprit? Inflation - a silent thief that erodes the purchasing power of hard-earned wages, leaving families struggling to keep pace with rising costs.
Milton Friedman, the renowned economist, defined inflation as the expansion of the money supply. This seemingly abstract concept has very real and devastating consequences for the average worker. As governments print more currency to finance their operations, the value of each dollar diminishes, leading to a cascade of price increases that outpace wage growth[2].
The stark reality of this inflationary spiral is evident in the skyrocketing costs of essential services and goods. Take healthcare, for instance. The average US family health insurance premium has surged from $6,000 in 2000 to a staggering $26,000 in 2024 - a 342% increase over 24 years[7]. This relentless rise in healthcare costs places an enormous burden on workers, forcing many to choose between medical care and other necessities.
The Widening Gap
The disparity between income growth and the cost of living is alarming. While the median family income in the US has increased 5.5 times since 1971, from $10,000 to $55,000, the costs of fundamental aspects of American life have far outpaced this growth:
- Cars: 12x increase (from $4,000 to $48,000)
- Houses: 14x increase (from $25,000 to $357,000)
- Ivy League education: 29x increase (from $3,000 to $87,000 per year)
- Healthcare per person: 37x increase (from $400 to $15,000)
These numbers paint a grim picture - the average American is worse off today than in 1971, despite decades of supposed economic progress[1].
The Housing Crisis
The housing market provides another stark example of inflation's impact. Rent prices for two-bedroom apartments have been climbing steadily:
- 2022: $1,341 (6.03% increase from 2021)
- 2023: $1,448 (7.95% increase from 2022)
- 2024: $1,813 (projected)
This relentless increase in housing costs forces many workers to allocate an ever-larger portion of their income to rent, leaving less for savings, investments, or discretionary spending[4].
Source of the Problem
We need to Get Radical (Remember the definition of Radical is “get to the root”)
At the heart of this inflationary crisis lies the government's monetary policy. In a fiat currency system, there's an inevitable temptation to print more money to finance government operations. This leads to a vicious cycle where prices and living costs rise faster than wages, leaving the average person feeling the pain without fully understanding its cause[1].
The Federal Reserve's Quantitative Easing (QE) programs exemplify this problem. During the Covid-19 crisis, the Fed was creating $120 billion out of thin air each month - a figure significantly larger than previous QE programs. This massive injection of currency into the economy has fueled the current inflationary pressures[8].
The Path Forward
To combat this inflationary spiral, bold action is needed. Some economists propose drastic measures, such as:
1. Streamlining government bureaucracies (reduce the hoard of conflicting, overlapping and duplication of services)
2. Cutting wasteful spending (kick the war profiteers out)
3. Reducing taxes
4. Reinvigorating domestic manufacturing. (Steel, Auto, Shipbuilding, Coal Mining, Textiles, Electronics, etc)
5. Enhancing workforce training. Just in recent years you couldn’t drive a block without seeing a STEM training sign in your neighborhood. I am suggesting we go back to fundamentals such as welding, carpentry, electrician, plumbing, masonry, farming. In addition to STEM we go with SMARTS
The Skills Gap Crisis: Why Our Future Depends on Blue-Collar Workers
SMARTS
Skills in
Masonry (clay fired brick, stone, concrete)
And (let’s get back to Work Everyone)
Related (mining, oil drilling)
Trades (like Electrical, Plumbing, Carpentry, Welding)
Services (clean rivers, paint inner city schools, staff day care)
6. Boosting domestic resource production. Scott Bessent, the nominee for Treasury Secretary is advocating for boosting domestic oil and gas production by an additional 3 million barrels per day. Keep in mind current levels are 13 million barrels per day so this is an impressive boost.
7. Reducing regulatory burdens on industries
While these proposals are controversial, they highlight the urgent need for systemic change to address the root causes of inflation[1].
In conclusion, inflation is not just an economic statistic - it's a worker's nightmare. As prices continue to outpace wages, millions of Americans find themselves running faster just to stay in place. Without significant policy changes, this inflationary trend threatens to undermine the very foundations of economic stability and worker prosperity. It's time for policymakers to confront this challenge head-on and implement solutions that protect the purchasing power of American workers.
Citations:
[1] https://www.jrmartincpa.com/salaries-and-inflation-how-inflation-affects-employees/
[2] https://www.hoover.org/research/inflation-true-and-false
[3] https://www.reddit.com/r/AskEconomics/comments/udx12y/is_inflation_always_and_solely_a_monetary/
[4] https://www.cxcglobal.com/blog/news/how-does-inflation-affect-the-labour-market/
[5] https://evonomics.com/the-truth-about-inflation-why-milton-friedman-was-wrong-again/
[6] https://economics.stackexchange.com/questions/47117/why-was-friedman-so-wrong-about-inflation
[7] https://www.roberthalf.com/au/en/insights/career-development/how-does-inflation-affect-employees-salaries
[8] https://www.econlib.org/persistent-inflation-is-always-and-everywhere-a-monetary-phenomenon/
[9] https://lattice.com/articles/how-inflation-affects-employee-compensation
[10] https://www.heritage.org/budget-and-spending/heritage-explains/the-real-story-behind-inflation
[11] https://miltonfriedman.hoover.org/internal/media/dispatcher/271092/full
end of segment
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In case you missed it:
Illuminated Ape and King of Money (both of Reddit Wall Street Silver and Reddit Silver Degen Club) and their terrifying campaign of extortion and blackmail
Each week, dozens of legally obtained recordings flood in through various platforms—Twitter, Reddit, email, text, and voicemail—creating a relentless atmosphere of terror and emotional distress for Jon Forrest Little from two individuals that skulk behind digital masks.
Legally obtained recording(s)
While I broadly agree with the points made in this blog, there is one aspect to inflation that I don’t hear in current commentary: the aspect of expectation inflation. Interestingly, I first heard this term/concept in a Motor Trend article some 30 years ago. The author compared the price of a 1998 Camaro to that of a 1968 Camaro, i.e. when it was first introduced (or thereabouts; first production might’ve been 1967). The author took the average rate of inflation over that 30 year period and applied it to the cost of the 1968 Camaro. When protracted 30 years into the future, the inflation adjusted price of that early model Camaro was still thousand dollars less than the 1998 Camaro. Why was that? Answer: the overall expectations of the driving public had inflated, too.
And there was a cost to that. By 1998, such extreme luxuries of the 1960s came standard. Things like: four-wheel disc brakes, full air conditioning systems, electric windows and electric door locks, etc. Those costs were not a factor in the 1968 model, but they were just about standard in the 1998 model.
That’s expectation inflation. Don’t get me wrong as I do believe inflation is very real and very sinister. Yet, when we look to especially capital-intensive goods like cars and homes, we must consider the increased cost factor for inflated expectations.
Too often, we get in our own way with the KEEP UP WITH THE JONESES syndrome. 🙄 Shoot, Waylon Jennings’ famous song LUCKENBACH, TEXAS (Back To The Basics) was all about that psychological conundrum. 😏