[jujugoboom]

> Services includes labor

No. "In classical economics, labor is one of the three factors of production, along with land and capital. Labor is often defined as the physical or mental effort exerted by human beings in the production of goods and services. In neoclassical economics, labor is a broader concept that incorporates all human activity that adds value to a product or service"[1]. And while the ECI does exist, and is used by the fed to inform inflationary policy, it includes all costs of employing someone, indicating inflation in the health care market just as much as in wages. Labor is known to be much more of a reactive market[2], and also much more affected by things like the labor participation rate than inflation on its own. Even your original source for real wage increases uses the CPI. It also makes sense to use a measure of consumer inflation when talking about wages, as again, most consumers aren't buying labor.

> If the FRB were only concerned with that, they'd probably not have voted to increase the interest rate on Feb 1st.

Yes because the FRB is concerned with large scale monetary policy, and only have a few strings to pull. Interest rate hikes are intended to slow monetary velocity, effectively decreasing money supply, and has nothing to do with the housing market.

> Of course it's not so easy for some people

Bit of an understatement

>but over the last couple years I've heard anecdotes from many business owners moaning over their employees' demands

And? Anecdotes aren't sources, so I don't know what to do for ya here.

> A friend of mine, an hourly worker, got an 18% raise in January

That's awesome for them! It doesn't change that its anecdotal, and doesn't change any of the previous data that I've included to show that at best the lowest 50% are just starting to reach and surpass where they were in 2000.

> The idea one might believe in either supply-side or demand-side causes of inflation and not both is strange to me

I never said it was one or the other, and even linked to sources that included a breakdown of the share of each. I was more speculating on the driver of the higher than average inflation since 2020, and included fed breakdowns that gave evidence for a good amount of supply-side inflation, whereas most American pundits tend to cast it in a demand-side only light (people have more money so they spend more kinds of arguments). I even pointed out where it was demand-side in the fed report, although they show that it is not more people with more money, but an effective contraction (from reduced monetary velocity) and subsequent rapid inflation of monetary supply following COVID.

>First, the primary driver of inflation in the long run is monetary policy

I really need you to pick a time frame. I thought we were arguing inflation for 2020s. Yes obviously monetary policy tends to have the most influence in the long run. I also don't think anyone would say that inflation in the 2020s has been driven by monetary policy, and in general it isn't in times where its higher than what is wanted from monetary policy, like what we've been experiencing.

[1] https://study.com/academy/lesson/labor-types-importance-exam... [2] https://www.forbes.com/sites/qai/2022/10/01/us-wage-growth-f...

[xapata]

We're largely talking past each other now. I find myself repeatedly trying to make a distinction between inflation in general and consumer price inflation specifically.

Consumers may not often directly buy labor (though it feels otherwise as a homeowner seeking a handyman) but the cost of labor matters nonetheless.

There are many people who might blame inflation in the 2020s on quantitative easing, which is a monetary policy.

It's interesting that you're going with a "classical" definition of labor, but not one for inflation, which would classically be defined as purely a monetary phenomenon independent of price changes due to supply and demand.

[jujugoboom]

> I find myself repeatedly trying to make a distinction between inflation in general and consumer price inflation specifically

The issue I'm having with the distinction you're trying to make is that you're also trying to argue wages, which is only helpful in the context of consumer price inflation. Consumer price is also the best measure we have of inflation, since it is the only measure that is widely available and open to the public.

> though it feels otherwise as a homeowner seeking a handyman

Yes, part of what you're paying for is labor, but I guarantee that if the laborers actually got paid what you're getting charged, the world would be a very different place. The main difference between labor and any other good or service is that it does not exchange at its value, it necessarily has to exchange below its value, or else nobody would see profit (that value that people make that companies keep). This is necessary in a capitalist economy or it falls apart. This is why its hard for me to want to include it in our discussion about wages and inflation, because it is valued very differently from anything else, and again, is not something most everyday people are concerned about, which I've been very consistent about arguing about. I have not once talked about how inflation has affected corporations or businesses because I honestly don't care, so I don't see how a discussion about cost of labor is anywhere near relevant (if you say its "part of inflation" again I'm done with this).

> There are many people who might blame inflation in the 2020s on quantitative easing, which is a monetary policy.

https://libertystreeteconomics.newyorkfed.org/2022/08/how-mu... Already included a link where I gave evidence against that fact, and have not once myself said it was. Not sure where you're getting this argument from, but its not mine and I've never claimed it.

> It's interesting that you're going with a "classical" definition of labor, but not one for inflation, which would classically be defined as purely a monetary phenomenon independent of price changes due to supply and demand.

If thats the definition you want to use, then why do you keep going on about labor cost. If you want to use the monetary phenomenon definition, then inflation is just about monetary supply being higher than it was previously, which is what I said. While we did "see" an increase of money supply at the beginning of 2020, it was not to the degree that people try to argue (mostly M1 catching up with M3), and the monetary velocity was horrendously low (e.g. coin shortage). A low monetary velocity is essentially a lower money supply, which when rebounding resembles inflation (the link I've now included twice from the NY fed).

I agree that we're largely talking past each other. I've been trying to keep the discussion on real wage increases and the fact that although it has happened for the bottom 50% in the last 2 years, it hasn't helped much with their situation, and no redefinition of inflation is going to change that, so I'm still not sure why you're so stuck on it.

[xapata]

Ah, good, so we've agreed that the pandemic-related economic stimulus appeared to increase real wages for the poor. That's all I was getting at.

Whether that's sufficient to be interesting, I'm not energetic enough to debate.

[jujugoboom]

Pretty sure I agreed with that ages ago... https://news.ycombinator.com/threads?id=jujugoboom#34591865

Hope you got what you wanted out of this

[xapata]

Same. It's hard to keep track of conversation in this forum. While typing a reply, it only shows the most recent comment. My comments are always myopic.