Destroying the "no one wants to work" argument once and for all

 So, the EPI recently looked at inflation and what's causing it, and let's kill this whole idea that labor costs are the core problem once and for all. I mean, this is even more vindicating of labor than even I would personally be.

So....right now. 54% of inflation is being driven by corporate profits, 38% by nonlabor input costs (supply chain issues), and 8% by labor costs. 

Yeah....I mean, I could have seen an argument for labor costs driving some of it before this, but this really shows how non labor this whole thing is. 8% inflation, and less than 1% in net is driven by labor costs. Meanwhile 4% or so is driven by corporate profits (price gauging), and 3% by supply chain issues. That's how the 8% inflation rate breaks down roughly. If corporations weren't gauging inflation would be 4-5% right now. Still high, but not as oppressive as it is now.

Normally, between 1979-2019, 62% is labor costs, 27% nonlabor input costs, and 11% corporate profits. Normally labor does drive most inflation, and for most of that period, inflation was at 2% or less generally. So very little inflation overall, labor driving the majority of the inflation, and I could have even seen an argument for slightly higher inflation assuming it translated to higher pay. But once you start getting above 4% inflation, it's time to rein that in. If we were looking at a situation with 8% inflation where the overwhelming majority was being driven by labor costs, I would say yeah workers are getting greedy and it's causing a wage price spiral and that helps no one.

But honestly? A lot of this is just companies price gauging. Raising prices because they can. Wages aren't going up, but prices are, with companies pocketing most of the profits. And a lot of it too is driven by supply chain issues. It mentions port shutdowns and collapse of supply chains combined with higher demand for physical goods. 

So let's kill this Joe Rogan/Elon Musk style narrative that the problem is lazy people not working and blah blah blah. It isn't. Heck, just for reference, I have a few friends looking for jobs and having trouble. And the ones that are hiring are still offering poverty wages of $8-9 an hour with inconsistent hours. One is thinking about quitting because he's basically just paying for gas to get to his job to work 3 hours before getting sent home. I know people will watch him quit and scream NO ONE WANTS TO WORK ANY MORE, but I'm sure people would if it freaking paid and offered decent hours and employers didn't act so entitled. 

The fact is, corporations are just being greedy. They're crying over a largely manufactured and exaggerated labor shortage, and they're pocketing money for themselves. 

How do we solve this? Well according to the EPI raising interest rates actually wouldn't be the solution. So I would have to redact what I said in previous articles about raising interest rates. That would just hurt workers even more without tackling the core challenges we're facing. THey seemed to offer two policies. "Care investments to boost expected growth in labor supply" or basically a higher tax on corporate profits, to disincentivize gauging. The first solution essentially amounts to more investment in childcare and elder care to drive more people to the labor market, but I don't understand how this would resolve the problems with the economy if it is indeed not driven from the labor side. I could get behind the second solution though. While I'm leery of over taxing the rich, one thing I will say about the high tax rates of the 1930s-1970s was that they did disincentivize the rich from taking home too much money. When you're taxed at 90% what's the point, it's better to invest that money back into the company and raise wages for workers. I generally would support a tax closer to the laffer curve to maximize revenue for my UBI and healthcare schemes without disincentivizing productivity, but honestly, I could get behind higher taxes if it reduces corporate power and causes companies to invest that money back into society instead. EPI only supports a temporary tax, but I do think we need to raise taxes on the rich in general. All of this neoliberalism over the past 40-50 years has been destructive to the American way of life for many people and has led to corporations having too much power to begin with. 

I think another solution that might be worth looking into is breaking up large companies. Like with food, you know most food brands on store shelves are owned by 10 companies? BREAK. THAT. CRAP. UP. Seriously, monopolies kill capitalism by reducing market power among buyers and concentrating it among sellers. This means higher prices. You need competition for capitalism to work. The fact that in so many industries most power is concentrated in fewer and fewer hands isn't a good thing. And if they use their power evilly like they are now, they need to be dealt with. 

Anyway, that's my take on it. Supply chain issues will likely take a few years to resolve, but we'll get there eventually. Generally speaking most of the inflation is bring driven by pure greed though.