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MM's avatar

Another consideration: how relevant is minimum wage in states that haven't raised it much?

For example, my state's (New Hampshire) min wage is no different than federal, yet all the fast food joints in town advertise $17/hr to start. I can't imagine anyone is working for anything remotely close to the legal min wage, at least in my area.

Not contradicting your thesis; but merely pointing out that we've moved from a regime of gov't-set min wage, to market-set min wage. If anything this will put even more upward pressure on wages & inflation.

And I agree, who in their right mind wants to lock in 5% for 20/30 years...? The fact that there's no money in duration is so weird to me - the best yields are quite literally on the 3 month (!) bill right now.

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Russell Clark's avatar

Well if you assume nothing has changed, then when the yield curve inverts is the best time to buy long bonds. In this case I think everything has changed, and when the yield curve inverts, you get paid to short the long bond

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JV's avatar

Extrapolating minimum wage inflation of 7% to total wage inflation of 7% implies everyone earns minimum wage

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Russell Clark's avatar

Indeed - I tend to see high end wage stagnating. But I assume if minimum wage rise as 7%, then the cost of agricultural and manufactured goods will also see rising inflation as well. If a lawyers see a bump in wages, I am not sure where they feeds into economy wide inflation (house prices maybe) - but when everyone at a GM factory sees a 7% pay increase, I see car prices rising by 7%...

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Andy Fately's avatar

you must not have many friends with this view :). but it makes sense to me

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Russell Clark's avatar

it can make sense - and be wrong! let see...

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Andy Fately's avatar

so true

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Jan 31, 2024
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Russell Clark's avatar

A lot of immigration is driven by students migration. the problem is that UK, Australia and Canada are trying to diversify away from Chinese students, but taking students from India and elsewhere does not pay as well. So to keep the education system revenue neutral, you have to take a lot more students from eleswhere.

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Nick Mathews's avatar

Almost like a mild version of the Weimar inflation.

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Russell Clark's avatar

Well wage inflation solves alot of problems

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