Hopefully wages rise with the Consumer Price Index (CPI). Arguably for the back-half of income earners this has not happened for decades.
If we experience the same consumer price increases as was experienced through 1980-1990, rents and goods will go up an average of 5.4% each year over a 10-year period.
If it gets as bad as the 1970-1980 CPI then rents, goods and services will rise almost 7.1% a year and will practically double after a 10-year period.
Here are the historical CPI numbers from 1913 to 2017 —(1970 to 1980 was not pretty.)
In the US, the combination of globalization, automation and lack of support for private sector unions means workers outside of the creative class have very little bargaining power. I'm sure workers will get raises, but I don't see much hope for them getting much above the inflation rate. The only political solution that seems to be getting any traction at all is raising the minimum wage. Some states are doing that, but I don't see the Federal minimum wage getting raised any time soon.
That just puts the crush on the sectors that Offer low wage jobs, increasing their costs and the prices they must charge their customers. The people who do get those jobs earn more, but there will be fewer of them, making the poverty trap even deeper.
I’m beginning to think a low Basic Income might help, maybe as little as a hundred bucks a month. The problem with current BI tests is they are Big Bang experiments - big basic incomes for a tiny number of people. However a relatively low BI combined with moderate minimum wages could effectively act as a subsidy on low paying jobs. It would have to be funded by a tax increase, but a relatively modest one. This should make more low paying jobs viable to offer, make them more economically attractive to workers in terms of total earnings, and make the businesses that employ people on low wages more price competitive, increasing low wage employment. All without the massive distortions to the economy a high BI could cause.
This approach to BI wouldn’t free everybody up to become artists and explorers, but that was always a fantasy anyway. Somebody has to do the productive work somewhere, the trick is to make that work progressively more secure and rewarding.
If we stop running a military empire we probably have enough peace dividend to provide a $45,000 a year BI that would truly make a difference. To do it we have to end standing armies and let all of the non-violent offenders out of prison. We would have to make deals with all the other countries to put an end to standing armies as a thing and use the UN to cooperatively resolve conflicts. The amount wasted on the military and war is staggering.
Wasted. I'm sure Iran, Bashar Al Assad, Putin and goodness knows who else would completely agree with you.
Anyway, the entire US military budget coms to about $2350 per adult American. Emptying half of the prisons would about double that (taking into account the productivity of released prisoners, the above includes full economic costs of incarceration). Only about $40,000 each left to find the funds for.
Unfortunately this is just wishful thinking. This is not going to happen anytime soon; maybe not in our lifetime. This does not mean we should not work towards it
If we experience the same consumer price increases as was experienced through 1980-1990, rents and goods will go up an average of 5.4% each year over a 10-year period.
If it gets as bad as the 1970-1980 CPI then rents, goods and services will rise almost 7.1% a year and will practically double after a 10-year period.
Here are the historical CPI numbers from 1913 to 2017 —(1970 to 1980 was not pretty.)
https://www.minneapolisfed.org/community/financial-and-econo...