Things that went whizzing by that I want to remember... First: Coming up on Thursday: Adam Gurri: ’Today Matthew Downhour writes about Henry George’s Protection or Free Trade, a new edition of which is being released soon and an event with DeLong and others will be held next week to discuss it… LINK: <https://twitter. com/adamgurri/status/1397902403488333825> <https://t. co/wV7XBmvSyA>
"Why is it so hard for workers to negotiate cost-of-living raises? Why was this so hard even in the late 60s and 70s, when unions were much stronger than they are today?"
In both the US and UK, the government instituted price and wage freezes. Wherever government controlled wages, wage negotiation is...difficult. In the UK, most employees of businesses were forced to accede to wage controls, although bosses found ways to skirt them.
How problematic inflation also depends on mortgages. In teh US, a fixed interest mortgage actually favors the homeowner with inflation as the debt is effectively reduced against the assets, without incurring any costs. Not so in the UK where mortgages were always floating and where rising interest rates and payments had to be made against the difficulty in negotiating wage increases.
I well recall UK newspaper articles in the 1970s discussing whether the individual was better of by saving more to cover rising prices or to maximally spend to prevent savings devaluation.
In summary, inflation can generate upset if the person was desperate to catch up with the rising costs due to inflation, and this was exacerbated when the government put on wage controls to prevent wage increases chasing inflation. Read any UK newspaper in the 1970s to see why the continued rounds of strikes to raise wages caused so much disruption that Thatcher was voted into power in 1979.
Sometimes it is useful to examine other countries to understand a phenomenon rather than only looking inward.
"Why is it so hard for workers to negotiate cost-of-living raises? Why was this so hard even in the late 60s and 70s, when unions were much stronger than they are today?"
In both the US and UK, the government instituted price and wage freezes. Wherever government controlled wages, wage negotiation is...difficult. In the UK, most employees of businesses were forced to accede to wage controls, although bosses found ways to skirt them.
How problematic inflation also depends on mortgages. In teh US, a fixed interest mortgage actually favors the homeowner with inflation as the debt is effectively reduced against the assets, without incurring any costs. Not so in the UK where mortgages were always floating and where rising interest rates and payments had to be made against the difficulty in negotiating wage increases.
I well recall UK newspaper articles in the 1970s discussing whether the individual was better of by saving more to cover rising prices or to maximally spend to prevent savings devaluation.
In summary, inflation can generate upset if the person was desperate to catch up with the rising costs due to inflation, and this was exacerbated when the government put on wage controls to prevent wage increases chasing inflation. Read any UK newspaper in the 1970s to see why the continued rounds of strikes to raise wages caused so much disruption that Thatcher was voted into power in 1979.
Sometimes it is useful to examine other countries to understand a phenomenon rather than only looking inward.