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The 2 biggest ways that cause people to afford less things over time

A few terms/things you should know. Buying power= this is basically how much you can buy with a given amount. Like lets say if you can buy 1 thing of gum with $1 today, but tomorrow it takes $2. The buying power of money decreases, where if tomorrow you can buy a thing of gum with 50 cents. The buying power increases. This is highly important because year over year, it is estimated you need to have a take home profit at minimum 5% more per year just to keep up with the prior rate of decrease buying power on average. Now it is closer to 15% or 20%. I don't know of a term for this, and looking into it I don't think there is even one. But basically you need to know how your pay in a given job/career field changes over time compared to the increase/decrease of…


A few terms/things you should know.

  1. Buying power= this is basically how much you can buy with a given amount. Like lets say if you can buy 1 thing of gum with $1 today, but tomorrow it takes $2. The buying power of money decreases, where if tomorrow you can buy a thing of gum with 50 cents. The buying power increases. This is highly important because year over year, it is estimated you need to have a take home profit at minimum 5% more per year just to keep up with the prior rate of decrease buying power on average. Now it is closer to 15% or 20%.
  2. I don't know of a term for this, and looking into it I don't think there is even one. But basically you need to know how your pay in a given job/career field changes over time compared to the increase/decrease of buying power. Like most people they tend to hardly ever see a pay increase if one at all. And most to get a pay increase have to jump to different jobs, or even jump to another company. And in some cases, you will see the same job getting more duties but with the same pay as before. Basically, you need to note the amount of effort, change in skills, and time spent doing a job vs changes in pay. It is basically looking at the value of your work done and how much that value has changed over time.

So lets say if you want to buy an item for $40 in 2012, you would need $48.98 (22.5%) more money on average if you were to buy it today. https://www.usinflationcalculator.com/

https://preview.redd.it/vxl5z65oz8h81.png?width=816&format=png&auto=webp&s=9d81435fba3cd3dcebdcad82133782a29be6a028

Now, if you look at how you make that amount over the time. There is a pretty good chance you most likely will find you have to put more effort in, using new skills + old ones, and so on. And this means the value of your work has automatically decreased by a huge amount. And this is just assuming the pay matches with the average inflation rate.

Now if it doesn't match with the average inflation rate which it most likely doesn't, this is worse. But lets say your work hasn't changed but it doesn't match the inflation rate. This means the value of your work again has decreased over time. The only win here is if your pay matches the inflation rate + your work doesn't change. This will indicate your value of your work stays the same.

So when you look at min wage people or most others. Note how their workload massively has increased over time. Like mid class people complained for years now saying they are doing 2 or 3 jobs in 1, but it is for the same pay. Their jobs in reality devalued by that amount. It devalued by 1/3 or 1/2 + the difference in inflation and pay difference over time.

Note: I didn't include opportunity cost because that is a gamble the bulk of the time. You can know the likely hood. But with going with our knows with if you don't get fired, you do whatever it is to keep the job, and so on. This is how things are.

Where some might say well if you go to school then you will make more money. This in some cases is true, but when you look at things like student loans. There is people today that took out a $30k student loan, over time paid $28k, and they still owe around $30k on top of that. So it is a gamble you will have a job in the long run to pay that off, that after things will be great, that you will make more money, there will be no medical problems to stop you from paying it off, and so on.

Note: The only real fix for this problem is the economic system went from an inflation economy to a deflation economy. This will increase your buying power year over year, and unless if you get pay cuts. The value of your work over time will increase by default.

If you think this is correct, then I highly suggest talking about this with others around you, pushing people in power to making the system into a deflation system, and things like this.

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