#economy #inflation #Biden #SOTU #wages
“Tackling inflation is ‘top priority’, ‘too many families are struggling‘”–President Joe Biden
Soaring inflation has hurt Mr. Biden in the polls, “inflation is robbing them of the gains they might otherwise feel”. Inflation is rising at an annual rate of 7.5%+ over the year through January.
Biden said he would cut energy costs, the price of prescription drugs, and childcare in the US while increasing competition between companies and making sure “corporations and the wealthiest Americans start paying their fair share”.
All of that is futile lip service to the Key problems
- the people do not want to work – the job leavers causes the costs of labor rise in order to incentivize workers to return to the work force. According to the U.S. Bureau of Labor Statistics, Last year was a historic one for American jobs. A record number of workers quit their jobs while US employers had more positions to fill than ever before. For example, in December – 2021, 4.3 million Americans quit their jobs, down slightly from the record 4.5 million alone in November, 2021.
- equally concerning is the fact that the job leaver market went from 2.5% of the unemployed market is some 15% in 2021. verses a steady decline in the 10 years prior, especially significant during the last Presidential term.
- and millions of workers left jobs for cash incentives, better pay or better benefits, people also left the labor market to care for children or elderly relatives during the pandemic.
Meanwhile, older workers retired early either because they could or because age discrimination forced them out of the labor market. This has caused labor costs to rise, which fuels inflation none of which Biden or the government can control.
Added to that most if not all of Biden’s initiatives will struggle to pass in a deeply divided Democrat party as the US heads into midterm elections this November, with polling indicating Republicans will take control of Congress.
In the weeds
Now for the $10 tube of toothpaste, a Key consumer product for everyone – not just the rich. Dentist should be laughing their way to the bank, with more tooth decay because people will be forced to bush their teeth less!
Backlash: Colgate-Palmolive Co CEO said last week at an industry conference that the household goods maker sees its new Optic White Pro Series toothpaste as the type of premium product “vital” to its ability to raise prices, which will help drive profit growth this year. Which is not beneficial to the average consumer where the price hikes are painful. To be fair, you do not have to buy Optic White, you can still buy some kinds of Colgate toothpaste as low as 99c on sale.
Look at eggs and milk, both basic items where a large egg was $1.46 a dozen, which is up from $1.01 a dozen in 2021 and $1.00 a dozen in 2020 and in 2022, it is $1.93.
Even milk prices have increased from $2.43 per gallon to now $3.70.
Heineken’s CEO says, “In my 24 years in the business I’ve never seen anything like it, not even close. Across the board we are faced with crazy increases of 15%+. There’s no model that can handle this kind of inflation. It’s kind of off the charts.”
Many companies are taking advantage of high consumer demand to continue to raise prices when they do not need to. So, as long as some consumers are willing to pay those high prices, there is no incentive to lower them.
So opines LTV’s resident economic expert Bruce WD Barren.
Have a healthy, prosperous day, Keep the Faith!