The narrative slants aren't even subtle.
Asset prices skyrocket: "Look, the economy's booming! Hooray!"
Wages go up somewhat: "Oh no, inflation! Watch out!"
[EDIT] I mean for general coverage of these topics in the media, not picking on this particular author.
If a %1 demand increase causes big price distortions in a RE market, you have much bigger problems in your city than airbnb, which is usually linked to supply control via restrictive and often corrupt planning boards putting up large barriers that you have to 'pay to win' to get past under the table, as has been shown recently in SF.
Tangentially: I know that's a norm (or almost one) but I think that they do, and that we all do. We are all responsible for our communities. Their state, good or bad, improving or not, depends completely on our actions.
> My argument is actually that the economy is built on the backs of underpaid workers, and now that these workers are demanding their fair value we will either see inflation or the failure of many businesses.
I don't see how it's inflationary from some money to be shifted from the owners to the employees. Also, I don't see how that causes a business to fail, unless it was operating very close the margin. Corporations are doing very well; Bezos has over one hundred billion; paying employees more won't bankrupt these businesses or have any effect on people like Bezos.
Not sure I follow where you’re going with this — are you suggesting SV salaries aren’t causing inflation in the local area? They absolutely have kicked off an inflationary feedback loop in SV real estate.
* Pay tech workers more to attract them to SV.
* Housing prices rise.
* Pay tech workers more to compensate for higher real estate prices.
* Repeat.
Suddenly you find yourself in a situation where $400k in total compensation for a single FAANG employee isn’t out of the ordinary. Great for them, terrible for everyone making normal amounts of money — houses cost $1M+.
Sorry I wasn't clear. My point was that people now focused on rising wages causing inflation are typically wealthy professionals (such as in SV). I imagine a different response if someone attributed it to the wealthy people's income.
It's often: 'We need to cut their taxes so they can stimulate the economy more!'
They want to say they don't want to pay their maids more without saying that their maids don't deserve more money.
Which do you think is a better approach, evaluating arguments on their merits or evaluating them on the basis of who might benefit if the arguments are valid?
We live in a world flooded by propaganda; we are committing political and social suicide by not addressing it. One powerful method of addressing propaganda is to identified beneficiaries - the people behind it are necessarily doing it for their own benefit.
And at the same time, evaluating arguments on their merits exposes us to propaganda: First, a well-known reason: it is much easier to make up lies than to determine the truth; the propagandist can easily consume all the resources of the person looking at merits. Second, humans are significantly worse at determining merits than they imagine (says much research).
Looking at merits depends on some good faith: The person submitting the argument is trying to present a valid argument. Propaganda is built on abusing that good faith.
Openly opposing wage increases for workers is political suicide, especially given the context of decades of flat wages and income inequality, and of the pandemic and essential workers, and given that it displays brazen greed and self-interest at the expense of the rest of the country.
But if they convince enough people - not everyone - that wage increases cause inflation, while they also stoke fear of it (remember during the Great Recession, fear of inflation was a tactic against Obama's policies), they can reduce the wages paid and keep more profit. It takes convincing people not directly affected by the issue, such as white collar workers who are already highly paid (ironically) and retirees, which IMHO is easy and often done. It also takes convincing people directly affected that their own wage increase somehow harms them, or that they should sacrifice for the country; that's harder, but as we've seen, many people vote against their economic self-interest and even risk theirs and their family's lives for political movements. Remember, they don't need to convince everyone, just enough people.
If inflation risks significant harm, and if wage increases are a significant factor (which I don't believe), I think suppressing wages is the last thing we should consider, if we consider it at all.
Imagine if they said, 'SV company pricing is causing inflation' or 'wages in SV are causing inflation'.