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Wages and Prices: Who Is Keeping Up with What?

Since President Biden took office, the media have run a constant stream of news stories about how high various prices were and telling their audiences…

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Since President Biden took office, the media have run a constant stream of news stories about how high various prices were and telling their audiences that this has led to mass suffering. These stories appear less frequently now, although we still hear Republican politicians and people posting in social media that they are paying $5 for a gallon of gas or $90 for a turkey.

It is impossible to know what specific people pay for an item. Who knows, some stores charge outrageous prices and maybe people purchased a specialty item rather than the standard fare version.

But, it’s not worth spending time on the anomalies. We do have good data on the averages from the Bureau of Labor Statistics (BLS), which puts a great deal of effort into tracking prices and rents around the country. I thought it would be worth just posting some of the price increases on key items since the pandemic and comparing them with wage increases for various groups of workers.

Source: Bureau of Labor Statistics and author’s calculations.

 

 

The graph above shows the increase in the average hourly wage since February of 2020 for all workers, for production and non-supervisory workers, and for production and non-supervisory workers in the hotel and restaurant industries. The average hourly wage for all workers increased 19.4 percent, for production and non-supervisory workers it increased 21.9 percent, and for workers in the hotel and restaurant industry it increased 31.6 percent.

There are a couple of points worth making here before comparing these increases to the price increases over this period. First, the 19.4 percent increase for all workers is a hair more than the 18.8 percent rise in the overall Consumer Price Index over this this period, but clearly not a great picture. However, it is a better story than many periods in the past, like the 1980s, early 1990s, and 2000s, when wages were not keeping pace with prices.

It is also important to remember that we were hit with a worldwide pandemic during this period. The impact of the pandemic caused wages to fall behind prices in almost every other country. As some people may recall, we actually had rationing (anyone got toilet paper?) in 2020 at the start of the pandemic. So, coming out slightly ahead is not a bad picture when confronted with a natural disaster.

The other point is that, in contrast to the pattern for most of the last four decades, lower-paid workers are doing better now than higher-paid workers. The category of production and non-supervisory workers includes roughly 80 percent of the workforce force. It excludes managers and higher-paid professionals like doctors and lawyers. In the last three and half years, this group is doing better on average than the 20 percent at the top. This has substantially reduced the wage inequality we have seen develop since 1980.  

This story is seen even more clearly with the 31.6 percent rise in the pay for production and non-supervisory workers in the hotel and restaurant industries. This is the lowest-paying major sector in the economy. The tight labor market has forced employers in this sector to cough up more money to get and keep the workers they need to run their businesses.

Okay, now for the comparisons. The 30.4 percent rise in gas prices would outpace the wage increases for most workers, but the workers in the hotel and restaurant industry still come out slightly ahead. It is worth noting that gas prices are hugely erratic.

Gas prices were relatively low at the start of the period and then were driven up by supply disruptions associated with the reopening from the pandemic (the Trump administration negotiated worldwide supply reductions during the pandemic) and then the Russian invasion of Ukraine. Prices have been falling sharply in recent months, as supply returned to normal (U.S. production is at a record high). The December prices are likely to be a few percentage points lower than the November data shown here, as prices are continuing to fall.

Food prices rose on average 24.7 percent since the pandemic. There were shortages of many items early in the pandemic. We expect shortages to lead to rising prices, but it seems that major manufacturers also took advantage of these shortages to jack up their profit margins. As the supply chain problems have been largely ended, profit margins are still elevated. This has caused most workers’ pay to lag somewhat behind food prices.

Here too it is worth noting that prices are hugely erratic. Since February, the price of store-bought food has increased at just a 0.7 percent annual rate. It is likely that wage increases will break even with food prices in the next year.

The third category shown is rents, which have risen on average by 20.7 percent. This is a bit more than the rate of wage growth for all workers, but more than a percentage point less than the increase for production and non-supervisory workers. It is more than 10.0 percentage points less than the wage growth seen by workers in the hotel and restaurant industries.

Here too there is a better story on the way. Rents shot up in 2021 as people working from home decided they needed more space and were prepared to spend some of the money they saved commuting to get themselves larger apartments or houses. This was a one-time effect.

While people are still working from home, the number is no longer surging. And much new housing is coming on line after pandemic disruptions limited supply in 2021-2022. The result is that rents have stabilized and in many areas are actually falling. The rent indexes in the CPI will lag the market, since they measure rents in all units, however we can already see the stabilization in the rents of units that turn over. This will show up in the CPI next year.

Source: Bureau of Labor Statistics and author’s calculations.

The graph above shows the prices of some of the food items that have been highlighted by the media when they rose rapidly earlier in the recovery. The price of bread has risen 28.8 percent since the pandemic, outpacing most workers’ wages, but not those of the low-paid workers in the hotel and restaurant industry. This was driven in part by a jump in wheat prices following Russia’s invasion of Ukraine, but wheat prices are now back to their pre-invasion level. This is an area where increased profit margins are likely a big deal.

The next item is beef, the price of which has risen by 30.3 percent. Here there is more of an explanation with the price of the underlying commodity, with wholesale prices having also risen by close to 30 percent. Interestingly, most of this rise was in 2020, when much of the economy was shutdown.  

Chicken prices have risen by 30.3 percent since the start of the pandemic, but this is also a case where good news is on the way. The big issue here was an Avian flu epidemic that devastated the chicken stock. This has more recently been brought under control. The stocks have been rebuilt and chicken prices have been flat over the last year.

Egg prices are largely the same story. They soared last year, capturing headlines and were highlighted in numerous news stories. In the last year, prices have plummeted, and egg prices are now up by 24.7 percent since the start of the pandemic. We can look forward to egg prices being stable or falling somewhat in the next year.

The last item is milk, which also captured headlines when its price rose rapidly in 2021 and 2022. This was likely driven largely by supply chain disruptions, as people were buying more milk in stores and less in restaurants. Milk prices have since stabilized and have fallen over the last year. They are now up by 20.4 percent since the start of the pandemic, somewhat more than the rise in wages for all workers, but slightly less than the increase for production and non-supervisory workers and more than 10.0 percentage points less than the wage increase for workers in the hotel and restaurant industries.

This is a very quick snapshot of some wage increases and the prices of some items that have featured prominently in news stories. There are many items whose price has risen far less than wages, like appliances, clothing, and college tuition. The prices of these items have not gotten much attention, but they are also part of people’s shopping basket.

Obviously, everything is not great in the economy, but most people are coming out ahead of inflation. With wages still growing at a healthy pace and inflation slowing, it looks like the picture will improve further in 2024, as we push the pandemic further into the past.  

Productivity has grown at an extraordinary 4.4 percent annual rate in the last two quarters. That compares to an average of rate of just 1.1 percent in the decade prior to the pandemic. We expect wages to roughly keep pace with productivity. No one expects the 4.4 percent rate to continue, and the productivity data are highly erratic, but with the spread of AI and other new technologies, it is plausible that we are on a faster productivity growth path.

Also, if we can sustain a tight labor market (we’ve had 22 months of below 4.0 percent unemployment, the longest stretch in half a century), we should expect to see profit margins eroded, as income shifts back from profits to wages. In short, we look to be on a promising economic path, but bad things can always happen.

The post Wages and Prices: Who Is Keeping Up with What? appeared first on Center for Economic and Policy Research.

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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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