Encourage Justin to Blog More
In an attempt to encourage Justin of Useful Genius to blog more, I have commented on his first and, as of now, only post Riddle Me This. Go, leave him comments. I've known Justin for several years. Well, known in the virtual sense, as I've never been to his hometown and, to the best of my knowledge, he hasn't visited New York in the years we've conversed. Anyway, he's a bright, funny, sarcastic guy. Like me, liberals find him conservative and conservatives find him liberal.
The current discussion is about competing claims regarding wage level increases and social security indexing.
There are a couple of competing claims running around the political spheres. I'ld like someone to reconcile the mutually exclusive conditions promoted by the same people.Wages are not keeping up with inflation.
Re-indexing Social Security Benfit increases from wages increases to price level increases will result in a drop in the rate of growth of social security benefits.
So which is growing faster? General price levels or wages?
To which I respond:
Not having seen the first claim in context, I can't be sure, but a couple of questions come to mind:1. Whose wages are not keeping up with inflation? Is the claim that overall wages are not keeping up with inflation, or just that wages for those on the lower economic rungs are not keeping up with inflation? I do know that the BLS has reported that wages for hourly workers are not, at this time, keeping up with inflation. That isn't necessarily the case over the long-term, however.
2. Assuming we are just talking about wages for hourly workers, what percent of overall wages do they make up? If, for example, the wages for non-hourly (presumably management) are high enough to constitute a significant minority of overall wages, then larger increases on those could, in fact, drive up overall wage increases to greater than inflation. Nonetheless, this would not benefit hourly workers.
This still leaves the long-term vs. short-term argument. Although wages for hourly workers are not keeping up with inflation in the short-term, that does not necessarily mean they are not keeping up with inflation in the long-term. I haven't seen statistics one way or the other. I could research it, but at this moment am feeling slightly too lazy to do so. So, if wages are, in the long-term, exceeding inflation, then presumably switching to inflation indexing will, in the long-term, drop in the rate of growth of social security benefits, even if that wouldn't necessarily be the case in a given year or short range of years. Much like even though the stock market may decline in the short-term, over the long-term, you can expect to see increases greater than inflation.
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