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UPS Union Issues
True Inflation, Company Profits, and COLA's..and Why I Am Voting No.
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<blockquote data-quote="BMWMC" data-source="post: 1128425" data-attributes="member: 37461"><p>I have to disagree with Orang.</p><p></p><p>Yes inflation measured by different goods and service have gone up faster than wages but many have actually decreased as well. Its weighted average so to speak. Inflation is always a monetary phenomena. Its directly tied to an expansion of the money supply. The Federal reserve nominal increases of 2% per year for the pre-crises years created a inflation rate of only 2.5-3% for twenty years. Which corresponds with UPS <em><u>compounded</u></em> wage rates. Yet the real issue for the future isn't inflation but deflation. This is the real purpose of expanding the money supply. Deflation occurs naturally in a developing economy where cost cutting and reducing inefficiencies reduce input cost. Be it globalization or machines/computers reducing labor and material cost. The fight is always against deflation which is far worse to an economy than inflation, so the economist say. </p><p></p><p>Deflation has become the growing menace to the global economy with over production, overcapacity, and yawning idle labor resources (see 27% unemployment in Spain/Greece and a real unemployment/underemployment in the US of 20%) creates downward pressure on asset prices as there are fewer people that can push aggregate demand. Japan is a example of what the US and the world faces for possible 1 or 2 generations. Falling worker participation, aging population, demographic shifts in purchase demands, competition from low wage countries that produce higher levels of unemployment and stagnate or falling wages. What we see from Japan is that no matter how much debt and monetary money printing they have done to stoke inflation the macro-deflationary under currents are to strong.</p><p></p><p>Just look at inflation expectations form the bond market. From the US, Germany, Japan 10yr are yielding less than 2%. Nobody see inflation getting much higher. There just to much slack in the global economy. If you look at the wage gains UPS workers got from the last contract compared to the decline in median family income for the rest of the country the contrast is striking. If your in the market for real estate or other fixed assets times couldn't be better for those who's wages have increased. Prices for many goods and services have actually declined for those with money in there hands and credit worthiness. I bought a 2012 Car ticketed at $24500 for $21000 and was only $3000 more than the last identical model purchased in 2003. A 16% rise but it came with $2000 in standard features that where only options then. So the real inflation was only 5% FOR 9 YEARS.</p></blockquote><p></p>
[QUOTE="BMWMC, post: 1128425, member: 37461"] I have to disagree with Orang. Yes inflation measured by different goods and service have gone up faster than wages but many have actually decreased as well. Its weighted average so to speak. Inflation is always a monetary phenomena. Its directly tied to an expansion of the money supply. The Federal reserve nominal increases of 2% per year for the pre-crises years created a inflation rate of only 2.5-3% for twenty years. Which corresponds with UPS [I][U]compounded[/U][/I] wage rates. Yet the real issue for the future isn't inflation but deflation. This is the real purpose of expanding the money supply. Deflation occurs naturally in a developing economy where cost cutting and reducing inefficiencies reduce input cost. Be it globalization or machines/computers reducing labor and material cost. The fight is always against deflation which is far worse to an economy than inflation, so the economist say. Deflation has become the growing menace to the global economy with over production, overcapacity, and yawning idle labor resources (see 27% unemployment in Spain/Greece and a real unemployment/underemployment in the US of 20%) creates downward pressure on asset prices as there are fewer people that can push aggregate demand. Japan is a example of what the US and the world faces for possible 1 or 2 generations. Falling worker participation, aging population, demographic shifts in purchase demands, competition from low wage countries that produce higher levels of unemployment and stagnate or falling wages. What we see from Japan is that no matter how much debt and monetary money printing they have done to stoke inflation the macro-deflationary under currents are to strong. Just look at inflation expectations form the bond market. From the US, Germany, Japan 10yr are yielding less than 2%. Nobody see inflation getting much higher. There just to much slack in the global economy. If you look at the wage gains UPS workers got from the last contract compared to the decline in median family income for the rest of the country the contrast is striking. If your in the market for real estate or other fixed assets times couldn't be better for those who's wages have increased. Prices for many goods and services have actually declined for those with money in there hands and credit worthiness. I bought a 2012 Car ticketed at $24500 for $21000 and was only $3000 more than the last identical model purchased in 2003. A 16% rise but it came with $2000 in standard features that where only options then. So the real inflation was only 5% FOR 9 YEARS. [/QUOTE]
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