And shockingly, that is despite a long-term trend in worker productivity of ~2% YoY [1].

All these productivity gains were siphoned off by the ultra-rich elites instead of going to the workers.

[1] https://www.mckinsey.com/mgi/our-research/rekindling-us-prod...

Thank the gods that the Fed has done an outstanding job stabilizing the dollar. I can't imagine what the country would be like if the Fed was never created and we still used shiny chunks of metal for money. /s

I think it's less about the Fed and more about the erosion of workers' bargaining power in the form of declining union membership and maybe more large employers who can push wages down due to labor market monopsony.

Since the creation of the Fed the dollar purchasing power (real value) has eroded to 98% of its pre-Fed value. Wage value wouldn't be decreasing if it weren't for the Fed. There wouldn't be an argument about "real wages" decreasing. Without the Fed every person would tangibly feel a decrease in the weight of their wages and resist it at every turn. The Fed allows you to be paid the same amount of dollars so you don't notice the decrease in the value you are being paid.

Any talk about real wages decreasing without addressing the impact of the Fed on the economy is missing the mark.

Wages would go down in dollar amount, rather than purchasing power if the dollar wasn't devalued.

Noticing that you're being paid less doesn't mean you're paid more, or even the same

If you showed up for work and your boss said they were going to pay you 2% less today how would you respond? That is a broken contract.

Wages before the Fed were weights of gold or silver that were called dollars. If I agreed to work for an ounce of silver a day I'm not going back if the company decided they were just going to pay me 3/4 an ounce instead.

You will go back if you have no other company who would pay you more than 3/4. And that’s what you get when there is no inflation but the employer side of the labor market becomes more concentrated or employers collude to only ever pay 3/4.

You have a very different model of human behavior than I do. Businesses don't fuck over their employees if they want to continue having employees. Also, in this scenario my savings doesn't also depreciate. When the employer decides to pay less I still have the full value of what I have already earned.

With inflation, my current earnings are reduced and any dollar savings I have are reduced.

I’m not talking about human behavior so much as about market structure. You go with the best offer that you get. If 3/4 is the best offer because your employer has driven labor-market competition out of town or because there wasn’t much competition in town to begin with (think Walmart or Amazon warehouses), then you need to take 3/4 or else be unemployed.

Savings help you for a while but if you’re like most workers, eventually you’ll need a job again.

But I think you’re also right in that inflation helps employers lower wages without being upfront about it.