By Duncan Smith
Is CNBC now hiring writers who have absolutely no inkling about how the economy and finances work?
Because that’s going to be a problem if that’s the case, since, you know, it’s a financial news outlet.
The network ran a story earlier today with this headline: “The upside to inflation: rising wages,” without a hint of self-awareness that despite higher wages, the higher inflation was going to negate any wage gains.
The story began:
As the economy picks up in the wake of the Covid pandemic, concerns about inflation are also gaining steam.
Already, prices on some goods, like cars, are noticeably higher, stoking fears that a sudden uptick in inflation will decrease purchasing power over time.
Although consumers may pay more for everyday items, it's not all bad news as far as household income and spending goes. Companies facing a labor shortage are also paying more to get workers to walk in the door.
'One of the major challenges for employers, along with finding workers, is to retain their current employees and one way to do that is to offer current employees a new opportunity and increased pay,' said Mark Hamrick, senior economic analyst at Bankrate.com.
'In the power struggle between workers and employers, the balance has shifted in workers' favor,' he added. 'We haven't always seen that in the past.'
CNBC did add:
Workers already saw a bump in their paychecks for June. As of the latest tally, average hourly earnings rose 0.3% month over month and 3.6% year over year, according to the Labor Department.
However, incremental wage increases are unlikely to keep pace as the cost of living rises, cautioned David Weliver, founder of personal finance site Money Under 30.
'There's going to be a lag,' Weliver said. 'The prices at the gas pump or grocery store may change very quickly but you might not get that raise for a year.'
Corporations are often slow to raise wages, especially if it's costing them more to buy raw materials, Weliver said. 'They'll be feeling a profit squeeze and the last thing they want to do is pay their workers more,' he added.
Which negates the entire stated premise of the story, hence the headline.
This has got to qualify for one of the dumbest stories of the week, if not the year. But it’s great spin, so maybe the writer, Jessica Dickler, can get a gig with the Biden regime.
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