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this post was submitted on 28 Jul 2023
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That something has a name and it's called "The Fed".
Higher unemployment and lower wages is a stated goal of theirs.
Why would they want that?
They don't, the Fed is sort of the hammer to break glass in case of emergencies, but the legislature has refused to do anything productive or helpful for citizens.
For years the fed just printed money to stave off an economic collapse. The legislative branch bought stock instead of passing laws and regulations.
The Fed isn't our government, but unfortunately our government isn't our government anymore either.
Because it makes people who are on the margins more desperate for work, which lowers wages or keeps them from rising as quickly as they otherwise would have.
no one wants lower wages, but wage increases lead to businesses increasing their prices.
supply shocks aside, there is a negative correlation between inflation and unemployment for a host of complex reasons. so there's ultimately a trade-off to pick.
unfortunately, the issue is that given businesses also function from the idea that there is such a trade-off, supposing we announce we want to lower unemployment, they raise their prices in anticipation.
it's a sad system
its also stuck in a real binary type of thinking, assuming things like regulating businesses and redistributing the wealth are impossible. so like no shit when you write the rules around keeping money with the rich, the rich keep the money😲
Mine as well say hey do you wanna burn alive or drown? Sorry its the only trade off we can offer :/
People have given good responses here, but the other, important reason is because when people in the lower socioeconomic strata make more money, they're willing to pay more for stuff instead of invest that money, meaning the prices for goods rises, which affects the lower classes most. If broad income rises, the price of goods rises. Are you making more "per hour" when everything costs more and you're still spending the same percent of your income on food and housing? And if your income goes up, and so do prices, people that didn't get that income raise get fucked hardest. That's basically what "runaway inflation" IS: it's when an economy starts increasing wages to satisfy cost, and cost goes to satisfy demand, so wages go up to satisfy cost and cost goes up to satisfy demand.