True Inflation, Company Profits, and COLA's..and Why I Am Voting No.

[anonymous6]

Our rider is still be worked out so I emailed our BA who is working on it about COLA ( cost of living adjustments.)

The poster who wrote that the part-time wage should be around $18 /hr adjusted for inflation is just about RIGHT! We have not received a raise in pay since before the 1990's.

The contract allows the company to use the wrong formula to figure out the COLA. It uses a government figure instead of a TRUE inflation figure such as the one that the Institute for Economic Research comes up with using all commodites and services people buy. COLA language needs change.

their number is 8% for 2012 compared to 1% that Uncle Sam uses!!! why the difference? because if the rest of the world knew our TRUE inflation rate they would start dumping US Treasuries and cause the good ol USA to default like Greece has. China is already wising up. they have dumped 100 billion of our treasury notes causing us some recent inflation. Our inflation will probably be higher than 6-8% from now on as the US dollar weakens. just google this for more info.

The TRUE inflation rate has been running a little over 6% since 1990. UPS profits have been averaging almost the same in that period. (this post is long so i am not gonna post all my sources. i have been researching this all night.) so anyway, this is my point. our wages are WAY behind the cost of inflation and the COLA language should of been addressed years ago.

at a 6% rate of inflation , prices of goods and services will DOUBLE every 12 years. ( using Rule of 72 ). WE HAVE ALL SEEN THIS already paying your bills and food for years now.. Conversely, UPS profits and growth has easily doubled every 12 years at a average 6% growth rate.

the poster who wrote that part-timers should be getting $18/hr ( adjusted for inflation ) was right. FT wages should be around $42/hr or more using the same formula.( since 1997 ) The company profits would of supported this. Our COLA language needs a major overall.

If you have wondered why the company has been making record profits quarter after quarter, this has been a major reason. we have been going backwards since 1990 ( not keeping up with inflation ). the first "raise" of 70 cents is less than 35 cents in 1997 dollars. we will be in poorer shape in 5 years than we are in now.

Our Brothers and Sisters who worked back before the 1990's had much more purchasing power than we do now. The same is true for every American. back when i was a kid only the father had to work to pay the bills and our Moms stayed home. now both Mom and Dads have to work to try to have the same standard of living. When union workers go backwards in pay and benefits, the average American worker is usually ahead of that curve. again , google this for more info.

The BIG corporations are just getting stronger and more powerful . We are already feeling the "squeeze" and have been so for years now. That is why we have to fight for a much stronger contract . The companies' profits will support that ( repeat: the COMPANIES PROFITS WILL SUPPORT THIS ) and that is why I am voting NO on the current farcical offer.

make your own conclusions.

 

[Catatonic]

I agree with this.
However, whatever index would be used, the developers of that index would be pressured to produce the same rates as the National government currently does.

Ask people whose main retirement income is Soc Sec whether the government index is accurate.

Nice job orang

As to whether current wages should reflect your selected index is another discussion.

 

[Catatonic]

Another thought,
Your analysis does not include UPS contributions to your benefits such as healthcare and pension.

UPS has spent many billions to prop up Teamster pension funds and the cost of healthcare has been rising at 8% per year for years now.

This does not really apply outside UPS but it certainly should be considered for UPS Teamster employees.

 

[BMWMC]

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 compounded 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.

 

[Catatonic]

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.

51 inch LED Flat-screen TVs have really come down.

 

[Dragon]

So has 60 inch LEDs.....

 

[Brownslave688]

I'm always amazed that every old retired ups driver I deliver to has a two story house and a farm.

No way we could buy that with our wages today.

Actually the big difference is no way could we run the farm to make extra income because we aren't off by 4 anymore.

 

[Bagels]

I'm going to disagree with much of your analysis. No disagreement that PT wages (even if the starting wage is hiked to $10) have failed to keep pace with inflation -- but unless you're in executive management, most workers have seen shrinking pay days despite record productivity and record corporate profits. The problem is magnified for bottom feeder jobs.

Inflation is difficult to measure, and no metric is perfect, but the government CPI is a fair standard. You need to remember that the median household income in the USA floats around $40K, with workers contributing $4300 toward their health insurance premiums, effectively reducing income to less than $36K. Millions of families, most without any other assistance, get by with this income, thus things can't be as bad as projected.

Take food as an example. When people go to the grocery store, they don't buy the same things that they would've 20 years ago. For example, 20 years ago "tv dinners" were limited in quantity and total jokes. Today, a diverse selection occupies large real estate & is a staple in many people's freezers. We've transitioned away from cooking from scratch toward convenience. Your local grocery store also stocks a much larger selection of "exotic" produce, meats & seafood than it did 20 (and even 10) years ago, in addition to a more upscale selection of organic, specialty and designer foods (such as Artisan breads). Ultimately, these things cost more. Private label (store brand) goods also constitute a large percentage of sales vs. virtually zero 20 years ago, which has lead to price increases on national brands. We've also seen a rise in discount & convenience stores - the latter of which sells goods at a much higher price. Ultimately, Americans are spending about the same at the grocery store as they were 10 years ago (no adjustments - just pure dollars) on higher volume; the percentage of income spent on food has dropped as well. So while the government is saying food is increasing up to 2-4% a year, sales figures tell otherwise.

Sticking with food, another complexity of inflation is dining out. Without question, the cost of dining out has increased over the past 10 years, but how do you measure such trends? Red Lobster, for example, hiked most of its prices this year but launched a comprehensive campaign in which coupons were readily distributed in circulars, the internet, and even at the restaurant, ultimately guessing that at least half of every check would be have some type of coupon redeemed with it. These trends exist elsewhere in retail, in which Kohl's sells a $36 pair of jeans for $70, with ongoing sales dropping the price to -- $36. Of course, some people will pay more, offsetting those who paid less. JCPenney attempted to move away from this model and failed miserably. Currently, our market is heavily promotional -- how do you measure this?

I could go on, but I won't.

I'm always amazed that every old retired ups driver I deliver to has a two story house and a farm.

No way we could buy that with our wages today.

Actually the big difference is no way could we run the farm to make extra income because we aren't off by 4 anymore.

Several drivers I work with have 15, 20, 30 acres and drive 90-minutes to 2-hours (each way) to work every day. In much of the country, sometimes with sacrifices, it's doable.

But housing was rightfully removed from inflation indexes since housing prices - since WWII - haven't really followed inflation. For example, if you live in Los Angeles, over the past 30 years you would've been far better off renting a house & investing the difference in payments -- you would've come out way ahead vs. home ownership. It's probably still true in most areas of LA, although the bargain housing market coupled with low interest rates will yield some exceptions.

Rent figures are much more indictive of a market.

 

[Coldworld]

I'm always amazed that every old retired ups driver I deliver to has a two story house and a farm.

No way we could buy that with our wages today.

Actually the big difference is no way could we run the farm to make extra income because we aren't off by 4 anymore.

Have drivers ever been off at 4...
I have sups who use to tell me years ago before driver release that they would have to go back to houses 2 or 3 times to get a signature and that management actually had lanterns for drivers for the dark...ymmv

 

[Coldworld]

I'm going to disagree with much of your analysis. No disagreement that PT wages (even if the starting wage is hiked to $10) have failed to keep pace with inflation -- but unless you're in executive management, most workers have seen shrinking pay days despite record productivity and record corporate profits. The problem is magnified for bottom feeder jobs.

Inflation is difficult to measure, and no metric is perfect, but the government CPI is a fair standard. You need to remember that the median household income in the USA floats around $40K, with workers contributing $4300 toward their health insurance premiums, effectively reducing income to less than $36K. Millions of. families, most without any other assistance, get by with this income, thus things can't be as bad as projected.

Take food as an example. When people go to the grocery store, they don't buy the same things that they would've 20 years ago. For example, 20 years ago "tv dinners" were limited in quantity and total jokes. Today, a diverse selection occupies large real estate & is a staple in many people's freezers. We've transitioned away from cooking from scratch toward convenience. Your local grocery store also stocks a much larger selection of "exotic" produce, meats & seafood than it did 20 (and even 10) years ago, in addition to a more upscale selection of organic, specialty and designer foods (such as Artisan breads). Ultimately, these things cost more. Private label (store brand) goods also constitute a large percentage of sales vs. virtually zero 20 years ago, which has lead to price increases. on national brands. We've also seen a rise in discount & convenience stores - the latter of which sells goods at a much higher price. Ultimately, Americans are spending about the same at the grocery store as they were 10 years ago (no adjustments - just pure dollars) on higher volume; the percentage of income spent on food has dropped as well. So while the government is saying food is increasing up to 2-4% a year, sales figures tell otherwise.

Sticking with food, another complexity of inflation is dining out. Without question, the cost of dining out has increased over the past 10 years, but how do you measure such trends? Red Lobster, for example, hiked most of its prices this year but launched a comprehensive campaign in which coupons were readily distributed in circulars, the internet, and even at the restaurant, ultimately guessing that at least half of every check would be have some type of coupon redeemed with it. These trends exist elsewhere in retail, in which Kohl's sells a $36 pair of jeans for $70, with ongoing sales dropping the price to -- $36. Of course, some people will pay more, offsetting those who paid less. JCPenney attempted to move away from this model and failed miserably. Currently, our market is heavily promotional -- how do you measure this?

I could go on, but I won't.



Several drivers I work with have 15, 20, 30 acres and drive 90-minutes to 2-hours (each way) to work every day. In much of the country, sometimes with sacrifices, it's doable.

But housing was rightfully removed from inflation indexes since housing prices - since WWII - haven't really followed inflation. For example, if you live in Los Angeles, over the past 30 years you would've been far better off renting a house & investing the difference in payments -- you would've come out way ahead vs. home ownership. It's probably still true in most areas of LA, although the bargain housing market coupled with low interest rates will yield some exceptions.

Rent figures are much more indictive of a market.

Are you trying to write a book....

 

[Bagels]

Are you trying to write a book....

I typically try to give thoughtful answers / stimulate thinking... but I guess the majority of people on here aren't interested, and come here just to whine. Of course, I work for a company in which the majority of my co-workers can recite every single sports statistic, but couldn't even point to Canada on a map. I count the days until I finish school and end my 13-year career here .

You're right... why bother?

 

[Brownslave688]

I'm always amazed that every old retired ups driver I deliver to has a two story house and a farm.

No way we could buy that with our wages today.

Actually the big difference is no way could we run the farm to make extra income because we aren't off by 4 anymore.

Have drivers ever been off at 4...
I have sups who use to tell me years ago before driver release that they would have to go back to houses 2 or 3 times to get a signature and that management actually had lanterns for drivers for the dark...ymmv

It's obviously all stories because few of us were around but we have a couple of 35 year guys that say when they started many guys had golf memberships. They would go for a round 2-3 times a week after work.

 

[Catatonic]

I could go on, but I won't.

Finally, something we can be thankful for.

 

[Catatonic]

Actually the big difference is no way could we run the farm to make extra income because we aren't off by 4 anymore.

You can farm inside, usually in the basement, with lights and hydroponics ... just have to blackout the windows and use solar so the electricity usage is in line.

 

[CharleyHustle]

You can farm inside, usually in the basement, with lights and hydroponics...

I have a huge basement and have floated the idea of using this space and hydroponics to supplement my retirement income. Can't get the wife to buy into it thou. I guess the profitability depends on your crop selection and market.

 

[Coldworld]

You can farm inside, usually in the basement, with lights and hydroponics ... just have to blackout the windows and use solar so the electricity usage is in line.

i always knew you were a closet pot head.

 

[Catatonic]

i always knew you were a closet pot head.

Not me but it is on the news all the time.

The latest reports are people renting/buying houses and use it to cook meth.

 

[Brownslave688]

i always knew you were a closet pot head.

Not me but it is on the news all the time.

The latest reports are people renting/buying houses and use it to cook meth.

Why would u rent a freaking house? All you need is a 2 liter bottle.

 

[bottomups]

You can farm inside, usually in the basement, with lights and hydroponics ... just have to blackout the windows and use solar so the electricity usage is in line.

It would be easier to just move to Colorado and plant your weed out in the back 40 these days.

 

[anonymous6]

Another thought,
Your analysis does not include UPS contributions to your benefits such as healthcare and pension.

UPS has spent many billions to prop up Teamster pension funds and the cost of healthcare has been rising at 8% per year for years now.

This does not really apply outside UPS but it certainly should be considered for UPS Teamster employees.

you are correct. i would like to know the difference from our total compensation package from 1996 and 2013. that would be interesting.