Retirement Planning - Lessons Learned

[kenmac]

A minimum wage not indexed to inflation just pushes low earners further into poverty.

I feel that pain !

 

[Steppenwolfe]

the book watership down warns of big govt and dependence, as do many others.

Love that book. Richard Adams...

 

[Fuddy1952]

 

[Torvy]

A minimum wage not indexed to inflation just pushes low earners further into poverty.

A minimum wage indexed to inflation leads to hyperinflation.

You cannot artificially increase wages to magically change the basics laws of supply and demand.

 

[goeduck]

A minimum wage not indexed to inflation just pushes low earners further into poverty.

Which came first, the chicken or the egg?

 

[California]

A minimum wage indexed to inflation leads to hyperinflation.

You cannot artificially increase wages to magically change the basics laws of supply and demand.

Shouldn't SS indexing be identical in that hyperinflation effect, as minimum wage? How are they different?

-
bah. typo corrected.

 

[KennyG]

The minimum wage is a bit of a red herring. According to the official US statistics, 247,000 people in the US made the Federal minimum wage in 2020. That's one out of every 635 workers. There should be a minimum wage to protect workers but it should be set locally (because of the huge differences in cost of living around the US) and have provisions for entry level workers and trainees. The current approach probably results in lots of unintended consequences.

 

[KennyG]

Shouldn't SS indexing be indentical in that hyperinflation effect, as minimum wage? How are they different?

Because SS is funded by current payees, in theory it should be unaffected by inflation. However, Congress has added benefits that were not originally included and has both added increases over inflation and decided not to reduce benefits when there was deflation. Also, the plan never envisioned the baby boom and the current low birth rate, as well as the significant increase in lifespan.

 

[Torvy]

To add to KennyG's point...many other wages are directly or indirectly indexed to the federal minimum. In other words, when the lowest paid workers get more, everyone above them wants (and gets) more because their work is more valuable than the minimum or entry wage. That rolls all of the way up and actually broadens wage disparity rather than the narrative that higher minimum wages shrink inequality.

SS, by contrast, is not driving up competition for wages. Workers cannot just stop working at any point and make more money on SS. There would be slight upward inflationary pressure, but it is minimal by comparison.

 

[ultrarunner]

Vehicles certainly a roller coaster the last 18 months with significant appreciation across all lines.

Average new car is over 40k now and used way up... several that lease have made out very well purchasing and reselling at lease end.

Last June brother needed to replace family car and paid 22k for new loaded Nissan Rogue.

Nissan had tons of inventory as rental fleet orders cancelled.

To buy same today 15+k more...

And don't forget $5 a gallon gas is everywhere now in SF area... AND few are complaining as long as they can fill up!