Can You Beat the Age of Inflation?

Three Rules for Surviving an Age of Economic Implosion

Image Credit: Visual Capitalist

More and more conversations I have these days go like this. There we are, a group of friends. One says, “Man, times are tough. We’re really struggling these days.” Another one says, “We are too. What should we even do?” And a third one points at me and says, “ask him, he’s the economist.” And I prepare to give my little speech about…

Beating the Age of Inflation. Can it be done? Is it even possible? We’re going to discuss something I don’t usually get into much, which is personal finance, though I imagine we can talk about it more if you like. There are a few rules in times like these — in fact, timeless rules, really.

Now, before I begin. A couple of caveats. These rules are going to seem really simple. Almost…trivially simple. The hard part is applying them. In sequence. And doing it consistently. Over time. Instead of giving up in frustration, or out of sheer neglect. And if you’re really living hand to mouth, well, sadly, even these rules won’t help much — you need to have at least some wiggle room to make them work for you.

So. Rule number one. Increase your income. I know, I know. That sounds like an idiotic thing to say. But let me tell you why I say it. Most people don’t ask, nearly enough, for what they deserve. To earn. Over time, that adds up to be ruinous. Across a society, when enough people don’t ask for more, and it becomes a norm, you get what’s happened in America — prolonged, social-scale stagnation at the median.

So let me say it again, and this time, with more meaning. Increase your income. Ask for a raise. A bonus. Whatever. I know, I know. Right now, you’re ready to throw your computer at me. Let me give you even more context, then. In this economy? Corporations are flush with cash. Profits are at the highest in recorded history. They’re earning so much they have no idea what to do with it, which is how you get billionaires buying comms platforms for Nazis and whatnot. This is precisely the time to ask for more, what’s fair, what you deserve, and be liberal with it. Believe me when I tell you they can afford to pay you more. The problem is that people don’t demand it, hard enough, often enough, and that’s doubly true down the generations and as we go down the income ladder.

Let me give you even more context. Who’s demanded raises lately? Workers at the lowest end of the scale — in hospitality, leisure, and so on. And you know what? They’ve gotten them. For the first time in…decades. It’s almost an electric shock for an economist like me to see incomes — anyone’s but billionaires, really — go up anymore in real terms. But low-wage workers have seen pretty significant increases lately (not all, but enough to say it’s a trend) precisely because they demanded it. Covid, of course, gave them a kind of wake-up call to demand it.

But the levers of supply and demand point squarely in favor of labour, across the board, right now. There’s money just weighing down the top of the economy, so much so its groaning and buckling. But people need to ask for more, demand it, be ready and willing to walk when the answer’s no…to get it. Now, that doesn’t apply to everyone — of course not. Everyone’s situation is different, and no, everyone can’t just say “more or I walk.” But a lot of people can, and far more who can should.

Of course, there are plenty of other avenues, by now, too, to approach this first rule: raise your income. You can find a “side hustle.” You can take on gig work of various kinds, you can go back to school and find another career, you can invest in something that pays you more of a capital income — doesn’t matter, really. We’re just talking about the rule, which is: to beat an age of inflation, you need to raise your income.

I know it sounds trivial. I know it’s going to make every angry leftist even madder. But economics are economics, and reality’s reality. No, everyone can’t just magically “do it.” But that’s not my point at all — it’s that in this records-profits economy, for many, it’s possible, but because our social norms are so twisted, so warped in favor of capital over labour, far fewer demands for higher incomes are made than they should be, at a social level. If that annoys you, sorry, but such are the hard necessities of adult finances. The hard part’s applying it. Especially repeatedly. Over time. Being disciplined about it.