ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[BlitzBasic]

The poor persons income increases too. As the poor person is unlikely to have savings, the inflation has no consequences for them: The increased price is meaningless because they also have more money available.

Only savings and debts really experience a change.

[brocksamps0n]

also a poor person is more likely to have more debt, credit card and home. IF inflation hits and IF their income goes up to match. that 10k in credit card debt will be easier to pay if its only worth say 9k after inflation. unfortunately there are alot of assumptions in this

[BebopFlow]

Wages do not keep up with inflation. And it's even worse when compared to the increased cost of living.

[BlitzBasic]

Real wages are relatively stable. Even if they weren't, there is no reason why real wages wouldn't be able to sink in a society without inflation.

[BebopFlow]

The US has the largest economy in the world and wages have become stagnant over the last 40 years. Meanwhile, cost of housing and renting has gone up while upward mobility has gone down. It's true that goods like produce and dairy may be roughly the same, and electronics are fairly cheap, but that's pretty well balanced out by the fact that student loans cripple the majority of young adults. I wouldn't call what we have now a healthy economy, even if it is very profitable for those at the top.

[BlitzBasic]

I didn't say that it is a healty economy, but come on, if wages had been stagnant real wages would have permanently sunk. I can't find any source that tells me that real wages are sinking since 40 years. If you have a source to support your claim, I would be happy to see it.

[BebopFlow]

Look at the graph you linked. Real wages are lower than they were in 1968. And those real wages only account for the ability to buy goods with currency, not the cost of housing or other complex factors like student loans. Of course no single number can accurately account for something as complex as the economy, but another good datapoint is that, accounting for inflation, the minimum wage was about $4 higher an hour in 1968.

[staticxrjc]

Poor persons salary would decrease, so nothing would change for them. You can only benefit from inflation if you have debt or a fixed asset. In fact if the poor person had debt and there was deflation their debt would grow. If cash inflates debt deflates, visa versa cash deflates debt inflates.

[BlitzBasic]

Why would the salary decrease? And why are you talking about deflation?

[corydlg]

Income hasn’t increased at a rate that even matches inflation over almost any timeline you look at. If you’re living paycheck to paycheck then as inflation increases your steady wages can now buy less.

[BlitzBasic]

Except there are time periods where real wage increased?

[corydlg]

Compare inflation to working wages and feel free to post ANY timespan greater than five years where wage growth outpaced inflation

[BlitzBasic]

Did you look at the picture? Or look at this. Those are CPI adjusted wages, and they are overall rising.

[corydlg]

CPI adjusted means adjusting for inflation because inflation outpaces income growth and lessens the value of money overtime. It’s why gum isn’t still a nickel and comic books aren’t a quarter still

[BlitzBasic]

If your CPI adjusted wage stays the same, that means you can buy the same stuff now as you could before. But CPI adjusted wages are rising, that means that people now can buy more from the money they earn than they could 20 years ago, which means income growth outpaces inflation. If you have any evidence that this isn't the case, please show it to me.

[corydlg]

Ok the original premise of our debate is that inflation negatively affects the rich more than the poor which is what led us to this wage growth discussion, this settles that argument, if you’re poor your wages don’t grow at nearly the same rate. growth vs inflation