Inflation fired by huge federal spending binge wipes out local workers' wage gains

Wages are up, especially for local low-income workers but they're not bringing any relief as the cost for basic subsistence items soars: food prices are up 5.7%--led by meat, poultry, and egg prices up more than 10%. George Avalos at the Merc and Sarah Cambon at the Wall Street Journal outline how undisciplined federal spending takes away whatever gains the market is providing workers.

WSJ:

This should be the best of times for low-wage workers, as pandemic-induced labor shortages force employers to sharply raise pay. Yet, for many, it doesn't feel that way, because those same disruptions have pushed inflation to near its highest rate in over a decade.

"I'm making more money. I should be able to see it,: said Troy Sutton, a custodian {who says his hourly rate rose 50% from 2020 to 2021}."But I don't see it because I'm paying more for stuff now."

Overall consumer prices rose 5.3% in August from a year earlier...near a 13-year high said the Labor Department.

Read the whole thing here.

SJ Merc:

The cost of living in the Bay Area is steadily becoming more expensive, fueled by increases in gasoline, food, and electricity, a new report released Tuesday by federal officials shows.

"All the money the Fed is pumping into the economy and the massive $3.5 trillian spending bill, along with an incredible level of consumer demand can bleed into the economy and cause long-term structural inflation," said Christopher Thornberg, founding partner of Beacon Economics.

"Inflation is the last thing we need," said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank. "The cost of living needs to hold steady. This is very unfortunate."

Read the whole thing here.

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