Key Points
- As shoppers await price cuts, retailers like Home Depot say their prices have stabilized and some national consumer brands have paused price increases or announced more modest ones.
- Yet some industry watchers predict deflation for food at home later this year.
- Falling prices could bring new challenges for retailers, such as pressure to drive more volume or look for ways to cover fixed costs, such as higher employee wages.
Not an economist per se, but what my econ prof in college put on the test is, more or less, that workers’ penury will eventually force them to take action to raise wages. This includes everything from strike actions to workers in general simply refusing to take the lowest-paid jobs anymore. The fact that employers will delay this process as long as possible and keep the raises as small as possible and workers will have to fight like hell to get even pitiful raises is also part of the theory. It’s a story of gIvE aNd tAKe that ignores the government took massive action last year to prevent the labor market from responding to the new market conditions and routinely acts to prevent wages from rising “too fast.” The price of everything can inflate to hell, but if the price of labor goes up in direct response just like every other commodity, whoa now, stop the presses, that’s an economic problem.