Profs:
Techs:
The projected inflation for 2009-2012 is based on the 1988-1991 time period, when we had a fairly deep recession, with 4 to 5% inflation.
Note that in 2007, a year for which firm data is available, the previous contract paid out roughly 1% when adjusted for inflation. This means that lots of members (who didn't get the full pool amount) got negative raises. Government data for 2008 only goes up to Sept as of this writing, but we appear to be headed for 4% inflation this year, maybe a little higher.
This is why we need a contract with inflation protection. we don't necessarily need COLA like the IAM gets, but we need something better than the joke language in the contract which only pays out when inflation exceeds 10%.
3 comments:
Dunno. This article predicts inflastion will be low:
http://www.reuters.com/article/ousiv/idUSTRE4AK5TQ20081121
This article predicts deflation:
http://blogs.reuters.com/great-debate/2008/11/21/fighting-deflation-globally-aint-easy/
This guy predicts 5%
http://inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp
This site says it's 5% now but should fall to 4%:
http://www.statistics.gov.uk/cci/nugget.asp?ID=19
This guy at the Fed predicts low inflation until a recovery begins, then watch out!
http://www.reuters.com/article/GCA-Economy/idUSTRE4AK3Y120081121
Lacker, one of the Fed's most vocal inflation hawks, will be among the voters next year on the central bank's interest-rate setting panel.
"It's essential that we not let inflation drift from view," Lacker said.
"It may seem premature to be worrying about how inflation behaves after the recession is over, but we need to be sure our policy remains consistent with a strategy that does not allow inflation to ratchet up over the business cycle," he said.
Hard to know which way to jump.
-Jimbo
This article talks about the negative 1% change in CPI for October (the biggest decrease since 1947 when the government began keeping such records) it also says: “The gap between regular 10-year notes and Treasury Inflation Protected Securities, an expression of what investors predict inflation will be over the life of the debt, dropped to 0.52%. That's the smallest since the government began selling TIPS in 1997.”
http://www.marketwatch.com/news/story/treasurys-gain-after-inflation-housing/story.aspx?guid=%7B17B2FC21-7AF1-4758-B463-3E9992718620%7D&dist=msr_31
If inflation is going to be low, 5% average increases look pretty good.
"If inflation is going to be low, 5% average increases look pretty good."
Yeah, IF.
At this moment, today, I'd be willing to bet money that inflation is going to be low for the next four years. Last week, I'd have bet the other way.
I saw a line by line comparison of the IAM and SPEEA contarcts, and although we did better (WAY better) in health care, they beat the pants off of us on raises and bonuses.
STILLnot sure how I'm going to vote, and ballots are due to SPEEA by 5PM Monday.
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