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Thread: Inflation

  1. #81
    Quote Originally Posted by CrazyNotCrazie View Post
    In this situation, if I am remembering my Duke economics classes correctly, the restaurants would raise prices to allow them to raise pay. Then the question becomes whether people will pay the increased amount to eat there. If they won't, the restaurant will close. If a lot of restaurants close, the cost of rent will have to go down as landlords will need to have income. And eventually you hit some sort of equilibrium between rent, salaries and food prices.

    There are a number of empty storefronts in my neighborhood in Manhattan and people always wonder how the landlords keep them empty for so long. There is always discussion about whether there is some type of tax advantage to keeping the store empty rather than renting at a lower price, because intuitively, one would think that renting for $1 is better than renting for $0, assuming that you have exhausted all opportunities to rent for more than $1 and you don't lock into a long-term lease at $1 that prevents you from getting better prices in the mid-term.
    Commercial real estate is something that I know a bit about. There are a bunch of things going on with vacant space, a key one being LLís desire to keep face rents high. Once you enter into a lease at a lower rate, that becomes the rate for that space, even if it may go up on the future. That rental rate affects the value of the property, which impacts financing and projected returns upon sale. So $1 in hand is not always better than $2 in the bush, so to speak.

    Also, retail is extremely challenged and was even before the pandemic. At my old law firm I represented a landlord that has space in mid-town and the ground floor retail was not worth nearly as much as the office space. They were lucky to have some long term tenants with viable uses (e.g. a bank branch for an office tenant), but one space was worth so little as retail that it made more sense to lease it to a large office tenant for a private entrance.

    One of the factors involved is the capital required to build out a space and the possibility that the retail tenant will fail before the LL recovers that capital. Generally, the LL will front the build-out costs (which are outrageous in Manhattan) and then recoup the costs over the term of the lease via higher rent. So if the tenant goes out of business within a year of opening (or even worse, before opening but after construction has started), the landlord will not only lose out on the opportunity to receive rent but all of the sunk capital that will now never be recovered.

    Finally, finally, sometimes the LL just doesnít care because all of the income from the property is going to taxes, insurance, operating expenses and debt service. In the case, might as well just hunker down and wait for the market to (hopefully) recover and save the investment.

  2. #82
    I believe there will be short term inflation, but gains in automation and efficiency will drive long term deflation.

    What we have at the moment is a supply side shortage combined with trillions in government money chasing those diminished goods. I don't think it will end well. Some prices will be sticky, but I think things like Lumber prices will come down, housing will come down once evictions and foreclosures start happening as well, eventually things will get back to normal...but my guess is inflation in certain sectors for the next handful of years (2-5?) and then prices will level and start to go down.

  3. #83
    Join Date
    Feb 2007
    Location
    Cincinnati, Ohio

    They've gone past half a penny...

    Quote Originally Posted by dudog84 View Post
    If you think Walmart is only going to raise prices half a penny when (if?) they eventually have to pay their employees a living wage, I have some land in Florida to sell you. Cheap! And yes CD, I know this is not what you were saying.

    They (and McDonalds, etc.) are going to stick it to us. Luckily for me I guess, I very rarely patronize either. I just get agitated when teachers, nurses, etc. are chronically underpaid while one American is approaching a "worth" of $200 Billion. No one is worth that much, I don't care what they produce.
    "Going to raise prices half a penny...." ???? They've apparently gone well past that. In today's Washington Post they covered the practice of decreasing package sizes to increase their profits. For example..

    "Walmart's Great Value paper towels, for example, went from 168 2-ply sheets per roll to 120. The price, at $14.97, remained the same for a dozen rolls despite the nearly 30% drop in product... A company representative said the change was the result of a product upgrade".

    I'm not sure what a 30% better paper towel looks like, but I don't think Walmart is worrying about raising prices half a penny. They've blown WAY past that.

    There were numerous examples for other retailers. They know consumers check prices fairly regularly. And they know they rarely think about the weight or volume.

  4. #84
    Quote Originally Posted by Ggallagher View Post
    I'm not sure what a 30% better paper towel looks like, but I don't think Walmart is worrying about raising prices half a penny. They've blown WAY past that.
    We pay quite a bit more for lint free paper towels. Getting paper towels that shed, is just annoying.

  5. #85
    Join Date
    Feb 2007
    Location
    Cincinnati, Ohio
    Quote Originally Posted by PackMan97 View Post
    We pay quite a bit more for lint free paper towels. Getting paper towels that shed, is just annoying.
    Agreed. We've gotten those too, and they are annoying. In this case though, Walmart had "no comment" about the upgrade. I'm betting that only their profit got upgraded.

  6. #86
    Quote Originally Posted by Ggallagher View Post
    "Going to raise prices half a penny..." ???? They've apparently gone well past that. In today's Washington Post they covered the practice of decreasing package sizes to increase their profits. For example..

    "Walmart's Great Value paper towels, for example, went from 168 2-ply sheets per roll to 120. The price, at $14.97, remained the same for a dozen rolls despite the nearly 30% drop in product... A company representative said the change was the result of a product upgrade".

    I'm not sure what a 30% better paper towel looks like, but I don't think Walmart is worrying about raising prices half a penny. They've blown WAY past that.

    There were numerous examples for other retailers. They know consumers check prices fairly regularly. And they know they rarely think about the weight or volume.
    I think the term for this is shinkflation.

  7. #87
    Join Date
    Feb 2007
    Location
    Chesapeake, VA.
    Quote Originally Posted by budwom View Post
    .

    The current minimum wage is absurdly low,... .
    I have heard a lot of people say this, and some who say it is the lowest it has ever been, when adjusted for inflation.

    Well, in 1974 I worked a job that started at $1.35 an hour and then went down from there. When it got down to $1.15 an hour I quit. Adjusted for inflation, I was making $6.27 an hour, which is clearly lower than today's minimum wage.

    Not an argument for not raising the minimum wage, mind you. More of a reminder that there have always been very low-paying jobs out there. Oh, and I guess a complaint/whine that is way overdue.

  8. #88
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by rsvman View Post
    I have heard a lot of people say this, and some who say it is the lowest it has ever been, when adjusted for inflation.

    Well, in 1974 I worked a job that started at $1.35 an hour and then went down from there. When it got down to $1.15 an hour I quit. Adjusted for inflation, I was making $6.27 an hour, which is clearly lower than today's minimum wage.

    Not an argument for not raising the minimum wage, mind you. More of a reminder that there have always been very low-paying jobs out there. Oh, and I guess a complaint/whine that is way overdue.
    What was the job?

  9. #89
    Join Date
    Dec 2009
    Location
    North of Durham
    Quote Originally Posted by rsvman View Post
    I have heard a lot of people say this, and some who say it is the lowest it has ever been, when adjusted for inflation.

    Well, in 1974 I worked a job that started at $1.35 an hour and then went down from there. When it got down to $1.15 an hour I quit. Adjusted for inflation, I was making $6.27 an hour, which is clearly lower than today's minimum wage.

    Not an argument for not raising the minimum wage, mind you. More of a reminder that there have always been very low-paying jobs out there. Oh, and I guess a complaint/whine that is way overdue.
    According to this article you were being paid below minimum wage, as it was $1.60 then got bumped to $2.10 in 1975. You should call up the employer and tell them they owe you back wages with compounded interest, based on the prevailing high interest rate at the time.

    https://www.cnn.com/interactive/2019...ear/index.html

    My first job was a few hours a week around 1991. Not sure if I was subject to federal or state minimum wage (likely state in NJ), but I was making $5 an hour and they had to give me a raise to $5.05 when the minimum wage went up. The company went bankrupt but I'm guessing my raise was not the cause.

  10. #90
    Join Date
    Feb 2007
    Location
    Chesapeake, VA.
    Quote Originally Posted by bundabergdevil View Post
    What was the job?
    I worked at an ice cream/candy store.

  11. #91
    Join Date
    Feb 2007
    Location
    Chesapeake, VA.
    Quote Originally Posted by CrazyNotCrazie View Post
    According to this article you were being paid below minimum wage, as it was $1.60 then got bumped to $2.10 in 1975. You should call up the employer and tell them they owe you back wages with compounded interest, based on the prevailing high interest rate at the time.

    https://www.cnn.com/interactive/2019...ear/index.html

    My first job was a few hours a week around 1991. Not sure if I was subject to federal or state minimum wage (likely state in NJ), but I was making $5 an hour and they had to give me a raise to $5.05 when the minimum wage went up. The company went bankrupt but I'm guessing my raise was not the cause.
    We were aware that we were being paid below minimum wage, and as time went on the pay got lower and lower. I lasted there for about four or five months, which meant that I worked there longer than any other employee.

  12. #92
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by rsvman View Post
    I worked at an ice cream/candy store.
    you were an essential worker even then!

  13. #93
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by rsvman View Post
    I worked at an ice cream/candy store.
    Well, I hope you at least got some free ice cream since you were below minimum wage.


    My second job was an ice cream store. My advice: donít eat anywhere teenagers handle your food.

  14. #94
    Quote Originally Posted by CrazyNotCrazie View Post
    According to this article you were being paid below minimum wage, as it was $1.60 then got bumped to $2.10 in 1975. You should call up the employer and tell them they owe you back wages with compounded interest, based on the prevailing high interest rate at the time.

    https://www.cnn.com/interactive/2019...ear/index.html

    My first job was a few hours a week around 1991. Not sure if I was subject to federal or state minimum wage (likely state in NJ), but I was making $5 an hour and they had to give me a raise to $5.05 when the minimum wage went up. The company went bankrupt but I'm guessing my raise was not the cause.
    My first job was in 92 as a grocery store cashier in NJ. Started at 5.10 when minimum was 5.05.

    The difference I had is that it was a union job. After 30 day probationary period it went up to $5.30 and I got a raise every 6 months. By the time I graduated high school, I was making double the minimum wage (which allowed me to work less hours and spend more time on the beach) and I got a small scholarship from the union to cover some tuition at Duke to boot.

  15. #95
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by PackMan97 View Post
    We pay quite a bit more for lint free paper towels. Getting paper towels that shed, is just annoying.
    we are finally nearing the end of the stockpile of third rate toilet paper which was purchased at Costco when none of the decent brands were available...a 36 roll box of Marathon is gone, and now the all time worst, a huge sack of Scott one ply is just about gone, I think I would call it half ply given its crappiness...

  16. #96
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by budwom View Post
    we are finally nearing the end of the stockpile of third rate toilet paper which was purchased at Costco when none of the decent brands were available...a 36 roll box of Marathon is gone, and now the all time worst, a huge sack of Scott one ply is just about gone, I think I would call it half ply given its crappiness...
    Good tp is worth it. It is a true first world benefit.

  17. #97
    Quote Originally Posted by bundabergdevil View Post
    Good tp is worth it. It is a true first world benefit.
    You work in marketing for Georgia-Pacific?

  18. #98
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by YmoBeThere View Post
    You work in marketing for Georgia-Pacific?
    You donít appreciate good TP? Savage.

  19. #99
    Join Date
    Nov 2007
    Location
    Vermont
    I'm tempted to throw the lousy TP out, but it's not in my DNA to waste things..I'm toughing it out...call me a Brown Beret

  20. #100
    Rough, tough and won't take no s*@! off nobody.

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