Inflation levels have been persistently low for years. In fact, we’ve been averaging 1.5 percent since 2009 and the Fed has been unable to reach its 2 percent target despite unemployment numbers at historic lows (read THIS). Fed officials are so baffled that they are reconsidering the way they look at inflation. But the exalted status given to the Fed has too many people obsessing about the wrong metrics. At least in terms of how ordinary people live and work and why the recovery never materialized for many Americans.
There is low inflation because we have low wages and we’re increasingly relying on the gig economy. Almost one third of the U.S. workforce (57 million workers) according to Forbes is driving for Uber/Lyft, delivering food, pet sitting, or working part-time at an Amazon fulfillment center (read THIS, THIS, and THIS). Side hustles that were never meant to be permanent jobs. You get a minimum wage, no health insurance, or benefits, and no prospects for advancement. So you can talk about inflation all you want but if people can’t afford to buy goods, prices are not going to rise. When you have to make the choice between paying your rent and buying a new coat, you’re not exactly part of an economic boom. You’re merely surviving.
Despite Tight Job Market, Labor Force’s Income Is Squeezed