Monopolies Cause Inflation, While Fed Chairman Powell Blames Workers

As American monopolies fix prices higher and higher, the Federal Reserve bizarrely has concluded that employment is to blame for inflation. For months, Fed chairman Jerome Powell has increased interest rates in the hopes of throwing workers out in the street and thus supposedly reducing prices. While I’m sure that corporate, donor-bought congressmembers appreciate his struggles in the class war against the poor and middle class, it’s all a crock.

Prices are high because of corporate collusion. They skyrocketed in the supermarket and at the gas pump three seasons ago due to idiotic western sanctions on Russian energy. Those sanctions backfired. Prices soared in the west, and when they finally sank a bit for energy, everyone expected food prices to drop too. They did not. Instead of holding huge food and energy corporations accountable through antitrust laws, our dear leaders defer to Powell and his insane crusade to crush the poor and the precarious by boosting unemployment.

He is having limited success. That’s because we’re still in a tight labor market, and in such a market, employees call the shots. Not entirely, of course; our corporate-owned government, misnamed democracy, would never tolerate that. But in tight labor markets job seekers have leverage. How much and what other advantages accrue to the poor is the topic of a new book, Moving the Needle, by Katherine Newman and Elisabeth Jacobs. “The labor market is at the heart of our understanding of poverty,” they write, because poverty is a function of persistent joblessness. But “when unemployment dips to a fifty-year low, all kinds of people who had no chance at a conventional job suddenly discover they are in demand.” That is where we are now, and Fed chairman Powell is on a mad quest to reverse it.

Tight labor markets appear periodically. You can’t count on them regularly, but they happen often enough not to be negligible. Their effects are all to the good: not only do formerly incarcerated people get a crack at a job, but so do lots of others with big, years-long lacunae in their resumes. Think drug users and the unemployed destitute. And when the labor market slackens, the tight market benefits endure for many, because people who got a shot at work for the first time ever often can hang onto that employment. At the very least, they’ve given their curriculum vitae a shine.

How can we extend the benefits of tight labor markets? The authors have eight pointed suggestions: increase the minimum wage; encourage fair scheduling practices as opposed to the abusive “just-in-time,” on-call scheduling so popular with employers these days; “develop a coherent system of public, universally accessible, portable benefits for workers;” rethink income and asset limits for public housing, food stamps, Medicaid and the State Children’s Health Insurance Program; “provide consistent public funds to workforce intermediaries,” i.e., NGOs and other groups that place people in jobs; “workforce development that works;” “incentivize employers to offer on the job training;” tuition assistance. Such policies could ensure that improvements caused by tight labor markets don’t peter out.

“When unemployment rates are at or below four percent,” the authors write, “households with children receive 16.5 percent more of the child support that they’re owed.” That’s because in tight labor markets, more fathers have work. This benefit is undeniable, except by ideologues like Fed chairman Powell, who thinks those fathers cause inflation. While it is true that improving job prospects for the destitute goes hand in hand with real estate markets overheating, the poor are not particularly causal with regard to stratospheric rents. Developers have their own logic, which focuses far more on what the very rich will pay. Throwing low-income employees out of work will not fix the housing market, currently stalled, by the way, for buyers and sellers. And happily, the poor have ways of dealing with confiscatory rents. “The economic value of ‘doubling up’ or living with relatives is a crucial component of the ‘private safety net’ for low-income families,” the authors write.

This book argues for full employment, the only sane, humane response to a so-called economic system, better known as a jungle, that, in San Francisco for example, boasts multiple empty homes for every one of the city’s thousands of homeless people. The authors want “more robust competition policy (including anti-trust and anti-trust enforcement)” to bring down prices, because corporate consolidation and pricing power has raised them. They make the case that “increasing wages does not ‘kill jobs’ even when the labor market is sagging.” The stats just don’t bear out this corporate prevarication, often ballyhooed in the media as if it’s the God’s honest truth.

But to take only one of the author’s eight suggestions – just try to revamp, that is, raise, income and asset limits for public benefits. U.S. corporations and their puppets in congress won’t stand for it. Subsidies are for oil companies, not public housing! And any legislator mildly confused on this point will be schooled immediately, as his or her corporate donor funding dries up. As for abolishing just-in-time scheduling – Ha! Corporations have no intention of abandoning this practice which makes workers’ lives hell.

And congress and the president agree. They even blocked a rail-workers’ strike last December that was partially caused by this abuse – rail employees being on a 24-hour, two-hour call; thus “Lunch Bucket Joe” Biden, supposedly sympathetic to blue-collar concerns, revealed that what he really carries around in that lunchbox are i.o.u.s to Big Business. Neither Biden nor Dem legislators will dare lay a finger on this corporate prerogative to make workers’ lives totally, wretchedly unpredictable. Lunchbox Joe and ghastly anti-labor Dems like Steny Hoyer know what will happen to them if they do. As for GOP lawmakers, well, they are fully aware who foots their bills, and it ain’t overworked employees who don’t know when or how they can schedule childcare.

Even in tight labor markets, the authors write, bosses are “resistant to giving up the benefits of just-in-time scheduling.” Having a ferocious grip over nearly every aspect of your workers’ lives, on and off the job, pays big bucks. It frazzles parents, leaves young children anxious and utterly upends single-parent mostly female-headed households. So just-in-time scheduling is also a feminist issue. From labor’s perspective, it is the scandal of the civilized world. But hey, it works for the oligarchs. So their president and their lawmakers fall right into line.

Meanwhile, one of the nation’s chief financial officers, the Federal Reserve chairman, ponders how to implement no kind of scheduling, to pitch the poor off the economic cliff once and for all. What do they do when they hit bottom? That’s not Powell’s problem, because hey, this is America baby, where corporations rule the roost and the law of the jungle prevails.

Eve Ottenberg is a novelist and journalist. Her latest book is Busybody. She can be reached at her website.