For most professionals, the
Since the beginning of the year, the
Working people are rightly outraged by price hikes, especially for basic necessities such as petrol, food and housing. However, inflation is just the latest blow to the living standards of the working class, which has faced a cost-of-living crisis for decades. Since the 1980s, employers have shifted health care costs onto workers, eliminated pensions and replaced them with 401(k)s, and kept wages low. Globalization and the transition to a service economy have meant that good union jobs have been destroyed and replaced with part-time, temporary and low-wage jobs. Meanwhile, the cost of housing, healthcare, education, and childcare have risen much faster than workers’ incomes.
In fact, inflation has only become a major political issue because, unlike the cost of housing, childcare, or health care, it affects the rich. Inflation is eating away at the value of the saved money they have and lightening the burden on those who owe money – the working class.
While inflation has squeezed the pockets of working people, the tight labor market has simultaneously boosted wages for employed members of the working class. Wage growth has been strongest at the bottom end of the wage distribution, meaning that, on average, inflation has less of an adverse effect on low-wage earners than on others. The current economy is actually benefiting the poorest strata of the employed working class in a number of ways: they are more likely than usual to be employed, can work longer hours (and therefore receive larger paychecks), and are able to exit jobs that are are abusive.
Rather than plunge our country into recession with rate hikes, our federal government should take other measures to ease the pain of working people, especially those on fixed incomes. Increasingly
Our government can also take measures to directly control prices as contained in the Emergency Price Stabilization Act introduced by
Aside from that,
Our government has the tools to address the cost of living crisis. You just have to use the right ones.