alt Hacker NewsWages for the average person (working class) typically remain stagnant while cost of living increases, particularly through inflation. I imagine minimum wage would be 25-30 bucks an hour if it did track inflation and that would only serve to keep your purchasing power constant.
Credit, in this sense, is also used to solve a cash flow problem. It’s a bad sign when that credit (or Klarna Pay-in-3 style setups) is applied to basic day to day expenses like buying groceries or other necessities.
Basically the market’s answer to increasing poverty: you’re not getting paid more, so how about we give you a payment plan to spread things out?
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I do wonder if there's hidden benefits to using Klarna to get, like, bulk discounts. Buy three months of toilet paper/chicken broth at once at Costco, pay it off over three months, save a few bucks each time.
> Wages for the average person (working class) typically remain stagnant while cost of living increases, particularly through inflation.
If wages were stagnant, nominally, you'd be making like 25¢ per hour. Wages are stagnant[1] only in real terms (i.e. adjusted for inflation). Cost of living and inflation are very different concepts, but since you indicate that inflation is responsible for most of the cost of living increases, wages have kept pace anyway, so...
[1] Technically not even. Wages are growing faster than inflation, but the margins are small enough that we accept calling it stagnant as a close enough approximation.
That's not true. Wages have generally outpaced inflation as long as we've measured inflation properly. Up until the early 1970s this was very palpable, since the early 1970s the delta has been much lower, wage increases have been very slightly above inflation.
Why does it feel different? 1: the amount of stuff we buy has increased a lot. Anybody who owns what would be considered solidly middle class in the early 1970s will feel quite poor today. 2: financial security is way down.
In the early seventies a middle class family of 6 would own a 1200 square foot house, a single car, a single TV and a single radio would be the sum total of the entertainment electronics they owned, they'd have less than a dozen outfits apiece, they'd eat out about once a month, a vacation to a neighboring state would feel like a splurge, et cetera.
But they were relatively content. 1: they were much better off than their parents and grandparents, who experienced the depression & WW2. 2: they were "keeping up with the Joneses". 3: they had a feeling of financial security due to job security and the fact that serious health events were unlikely to financially devastating.