'The last thing average working people need is for the Fed to raise interest rates and slow the economy further. The problem most people face isn't inflation. It's a lack of good jobs.'
The January jobs report from the Labor Department is heightening fears that a so-called"tight" labor market is fueling inflation, and therefore the Fed must put on the brakes by raising interest rates.Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises.
Fed policymakers are poised to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices—and that this wage-price spiral could get out of control. There's no"wage-price spiral," either . To the contrary, workers' real wages have dropped because of inflation. Even though overall wages have climbed, they've failed to– making most workers worse off in terms of the purchasing power of their dollars.
Only 6 percent of private-sector workers are now unionized. A half-century ago, more than a third were. Today, corporations can increase output by outsourcing just about anything anywhere because capital is global. A half-century ago, corporations needing more output had to bargain with their own workers to get it.
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