They fully intend on attempting to change state law to tie contract wage/salary increases to CPI which is in itself a flawed methodoloy...
The first technique, and the most obvious, is the reporting of "core inflation," that is, the inflation rate minus the change in prices for food and energy. These items are excluded from the inflation figures because they are "too volatile."
The second method is hedonic adjustment of the prices of items in the basket of goods on which prices are calculated.
Hedonic price adjustment is the adjustment of the price increase of those goods to account for quality improvements. If the price of a personal computer increases by 10% in a year, but the Bureau of Labor Statistics determines that the PC has 10% more memory than last year's, its hedonically adjusted price increase is zero.
The third adjustment is for substitution. The BLS adjusts for the fact that if the price of beef rises relative to that of chicken, consumers substitute chicken for beef in their diets.
Mr. Gross argued that these adjustments mean that the CPI inaccurately reflects the true changes in the cost of living for the average person. Therefore, since Social Security and pension benefits, as well as some wage increases, are based on the reported CPI, Americans "are falling behind the inflationary eight ball."http://www.investmentnews.com/article/20041025/SUB/410250702You think it hurts now?
Just wait.
It's going to hurt a whole lot more once they're done with us...
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
