Biden, Democrats' spending bill the 'clear reason' for inflation 'spiral': Sen. McConnell
Senate Minority Leader Mitch McConnell, R-Ky., slams the Democratic Party for spending bills he argues have contributed to record inflation and weighs the outcomes of November’s midterm elections.
Politico suggested that smaller pay raises "could be good thing for workers" in an article on Wednesday.
Economics reporter Victoria Guida wrote that over the past few months wage gains have slowed after previously reaching decades-high rates. While she noted that this spelled trouble for one of the few positive numbers in the economy, Guida wrote that slower wages could be "good news for the nation’s labor force."
"That matters because if prices and wages keep pushing each other up, the Federal Reserve — already under tremendous strain to rein in inflation — might be forced to move even faster to ramp up interest rates, throwing people out of work and thrusting the economy into a painful recession. Instead, slower wage growth could help bring down prices and ultimately mean less sting for the average worker," she wrote.
Money and receipt being placed on the payment binder for payment of a meal. (iStock)
She also quoted Dean Baker, a senior economist at the progressive Center for Economic and Policy Research, who said that slower wage growth can take "an enormous amount of pressure off the Fed."
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"Average wages this year are up more than 5 percent from a year ago, the fastest pace since Ronald Reagan’s presidency. But that has caused concern at the Fed that the trend might accelerate and feed back into price increases, which have already been eating away at those impressive gains. The steady decrease in the speed at which wages are rising could allay those fears," Guida wrote.
The article faced controversy on Twitter, especially for the original headline which read, "Pay raises are getting smaller. That could be a good thing for workers."
"Poverty, so hot right now," Grabien founder Tom Elliot tweeted.
Wall Street Silver, a popular investing forum on Youtube and Reddit, tweeted, "You should be happy your pay raise is so small. Corporate media propaganda narratives."
"St. Louis on the Air" producer Evie Hemphill wrote, "This is so insulting. Last night listening to Marketplace briefly I got to the point where I just had to shut it off because the economic measures and reporting feel so deeply out of touch from everyday people."
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At some point the article was retitled "There's one hopeful sign for the Fed on inflation. Really."
Politico confirmed the first headline "was one of several used" for the article and said "Headline A/B testing is a standard practice across the industry, often resulting in multiple versions of headlines for a story."
1040 income tax form and w-2 wage statement with a federal Treasury refund check. Closeup with selective focusing. (iStock)
However, the original headline can be viewed on Politico’s tweet of the story.
"Bad news: Pay raises for Americans are getting smaller. The silver lining: That could help bring down prices and ultimately mean less sting for the average worker," Politico tweeted.
Sports reporter Michael Sykes responded, "And we're supposed to read this as a good thing???" While author Michael Arceneaux tweeted, "The government is trying to facilitate a recession to offset inflation at the expense of workers, but they couldn’t do it without the assistance of detached people in media laundering their flawed logic for them."
Guida defended her article on Twitter.
"For those folks on Twitter who didn't actually read this article, the premise is essentially that getting a 4% raise (rather than a bigger raise) is better than living through a recession where you lose your job," Guida wrote.
She added, "The dilemma here is this: can inflation come down without the Fed using the labor market (layoffs/pay cuts) as a cudgel? If yes, that is GOOD NEWS, and workers will end up better off in the long run."
She also insisted in an earlier tweet, "This is a depressing story, but none of the ways of getting inflation down are really very happy."
People shop in a supermarket as rising inflation affects consumer prices in Los Angeles, California, U.S., June 13, 2022. REUTERS/Lucy Nicholson
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On Wednesday, a new economic report showed that inflation rates reached 9.1% in June, another new 40-year-high reached during the Biden administration.