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Melissa Harris-Perry: This is The Takeaway. I'm Melissa Harris-Perry. Now, thank you so much for joining us after what has been a pretty tough week of winter weather across much of the country. Hundreds of thousands were left without power after storms swept through the Northeast, Midwest, and part of the south. We're hoping for restoration of power, and a warm dry weekend for everyone. Now, yes, this is our weekly politics show, but I start on this weather note, in part because I've been obsessively checking the 10-day forecast.

You see, my youngest kiddo is having her eighth birthday party next weekend. After two years of family-only celebrations, we're excited to have a handful of fully vaccinated friends join us for cupcakes and a good bounce on the old trampoline. Of course, that means the trampoline can't be covered in six inches of snow, and thus my obsession with weather.com.

Now, right now, here in North Carolina, it looks like we're going to have clear skies and warm weather, so I popped on over to my favorite discount party supply place to get some decor and party favors. I went to what I like to think of as my personal favorite aisle, the Dollar Aisle. That is when I saw it.

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The Dollar Aisle, people, is now the $1.50 Aisle, $1.50. That's a 50% price increase. How is that even possible? We're talking about party favors, people, not a used car, or a Netflix subscription. Seriously, how is that possible? The thing is there's at least some observers who suggested that I can blame the young woman who bagged my items, the one who now makes $10 an hour, rather than $7.25 for my staggering party planning shock.

Reporter 1: Rising wages aren't the problem, the problem is they're not actually keeping up with inflation, and it leads to this spiral and this chase where no one actually feels better off.

Reporter 2: Do we want wages to catch up with the prices? Because obviously, we don't want real wages to go down. That hurts the worker, but on the other hand, if we really catch the wages up to prices, won't that just feed the beast of inflation?

Reporter 3: We have seen an increase in the minimum wage, in wages in general, at the bottom. On balance, you say this can raise living standards for the working poor, but now, attention is turning to its inflationary effects.

Melissa Harris-Perry: Now, I got to say, I'm not yet ready to point the finger at hourly workers, whose wages have increased only moderately and unevenly, for an inflation rate that has pushed up over 7%, but I'm not an economist. Some economists are indicating that rising wages fuel inflation. Let's be real here. Inflation is annoying, but relatively inconsequential for those at the top of the income distribution.

I can pretty easily absorb a 50% increase in my dollar aisle kid party items, but working people and families who are trying to make ends meet without the security of a true living wage, well, that's no party at all. Joining us to untangle the web that is our economy is Anne Price, president of the Insight Center for Community Economic Development, and Heather McGee, author of The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together. Anne, Heather, welcome back to The Takeaway.

Anne: Great to be here.

Heather: Glad to be with you.

Melissa Harris-Perry: Heather, let me start with you. We haven't chatted in a while, but we did spend years talking about-- during the time that you were leading Demos, we often spoke about the importance of moving the minimum wage up, providing for better wages for workers. You always told me at that time that it would have a positive net effect on the economy. I guess I'm wondering, were you wrong?

Heather: [chuckles] That's such a good question. A little thing happened. Yes, wages have been rising because of movements like The Fight For 15, demanding finally that big box stores raise their wages, demanding that cities and states raise the minimum wage. That was all a good thing, a good thing for the take-home pay of the workers who are the engine of our economy, but then the pandemic happened. That's really what is accounting for the lion's share of the inflation problem in the US and across the world where there hasn't been a fight for 15 that has raised wages in a pretty short period of time.

There's an old theory about the wage-price spiral that I think is what you're getting from some of those economists, we are not there yet. Really honest economists would say that we are not there yet. What happened first was a small bump in wages for the bottom of the pay scale and then the pandemic. The pandemic with its crunches on supply, with people moving rapidly out of the labor force, and a whole bunch of things I'm sure we'll get into, is really the villain here, not a fast-food worker making $3 more an hour than she did before she started striking.

Melissa Harris-Perry: That's helpful. Anne, maybe you can start to untangle some of those pieces that Heather is giving us here. We, certainly, here on The Takeaway also reported on the supply chain question, the issue of rising demand for certain kinds of consumer goods when so many in the middle class were able to stay home to work, and therefore wanted to buy more consumer goods at what had become both their workplace and home space. I'm wondering how should we understand wages within this complicated inflation story?

Anne: We know that the pandemic has skewed demand. What we want today in terms of services and goods has changed. People aren't getting those in-person services, like maybe getting a pedicure, but they are splurging on goods, more durable goods. That's affected supply chain issues, and that's changed what demand is in play. We know that what's happening with everyday consumers has shifted, and that's caused a supply chain issue. That is one of the reasons why we're seeing this level of rising inflation.

Heather: We use these words like inflation in saying that demand pushes prices higher. That's so disembodied. There's somebody in a room who decides, "No, it's time to take down those dollar signs and print some new ones that says $1.50." We're taking out so often throughout the media, the agency. This is how it actually works, if people are buying goods and services really eagerly, as we have been during the pandemic, businesses are raising prices, not because they're forced to, but because they can make more money selling fewer things. If they lack supply, they raise prices so they could make more money selling fewer things, or they just choose to charge more because they realize they can raise prices and improve their profits without losing customers. That's what's happening, we are continuing to buy-- you still bought those party favors at $1.50.

Melissa Harris-Perry: Listen, you better know I did. That's right.

Heather: Exactly. That's why corporate profits are at a record high. Let's put the agency where it belongs. Corporations are, some might say, price gouging at this moment, that's inflation, it's not wind blowing a balloon up. It's someone making a decision and making more money.

Melissa Harris-Perry: All right. What power then do I have, for example, Anne, as a consumer, should I walk away from the $1.50 Aisle that used to be the Dollar Aisle? I know there's actually a whole environmental thing here as well with this stuff, but let's just stay on the inflation piece. Do I walk away from it? Maybe as a member of the media, do I stop talking about how much inflation there is? Because I guess I'm wondering if that creates a cover that allows for these prices to go up.

Anne: We know that inflation hits us so immediately. it hits a household so immediately. It does have an effect on the decisions you want to make for your family. Maybe $1.50 is not going to be a life-changing decision, but certainly, when you think about probably the biggest expense, and one that probably is of most concern is housing, and the rising cost of rents. That hits people most immediately.

I just had a call from my brother last week, who said, "I got a notice that my rent is being raised $1,000 a month. This can't be possible." The way that this is hitting households certainly has an immediate effect. The reality is though, inflation's effect on the economy is not like our household budget. What we may know about the kinds of remedies to a complexity here is really less known than we think.

I would agree, we spend far too much time blaming workers, blaming truckers, and a host of other folks, saying that they're marching with their feet when people are making decisions and moving from one job to another, to take care of their families, who we have to look at the role of corporate concentration and corporate power, as Heather mentioned, as one way to just truly drive up prices.

We know that households don't act like our economy, and the fact that inflation is scary for some families living on the edge hopefully, won't just spark an immediate too soon reaction to think about interest rates.

Melissa Harris-Perry: Oh, there you go. You just said it. Anne, I promise we're going to come to rental housing and how expensive that's gotten in just a moment, but you said the thing I've been wondering about here, which is that interest rate question. Heather, let me come to you on this. Why should regular folks, why should people who don't have hundreds of thousands of dollars invested, and who are more likely to be borrowing money than to be earning interest, why should we care about what's about to happen or might happen around interest rates?

Heather: Let's just back up for a quick second and say why is the Fed responding to inflation by raising interest rates, or why is that what everyone thinks will happen in March? It's because if there's too much inflation, the Fed, which has some pretty blunt instruments, and is looking at a mandate around employment, and a mandate around inflation, will say, "Okay, let's cool down the economy."

Now, for most people, it's like, "What? Are we living and working to grow the economy? Don't we not want to make money more expensive?" All these things that seem really counterintuitive to the average person. I think, in some ways it really is, but to your question of how should an average person might remember less than 50% of the country owns stocks, so what we often think of as the real marker of the temperature of the economy with the stocks and bonds is really not relevant to the people at the base of the economy. Why we should care about rising interest rates is just a few things.

One, lenders will often pass that right onto our debt service. Debt is the story for most Americans. Assets are not. We still are a renter economy. We still are a debtor economy, and so that can mean higher interest rates, variable interest rates on loans, and it could mean that hiring slows down. Now, I think the latter is less likely, given the big picture of labor force supply increasingly two pieces white immigration. We don't have the same number of immigrants as we have had in the past because of federal policy, which I have a big problem with, and because women have run out of the labor force to take care of their children and aging parents. I think really the issue is going to be higher cost for debt.

Melissa Harris-Perry: Anne, you were the one to first name-check rent here. Are these rent increases, like as Heather was talking about, the wind blowing the balloon up, or is this about landlords going back and getting their dollars that they felt like they didn't get during the pandemic?

Anne: Certainly, we can see that there are legitimate increases in costs that landlords would face, given rising inflation. Some of that is expected. I think one of your callers talked about an 8% or 10% increase, which is higher than probably you would see year to year. We've seen across the country, some outrageous increases in rent, not just now, but even before the pandemic, people seeing $500, $700 dollar increases. We also saw a number of companies and corporations really pushing people out, filing for massive evictions, evictions happening when there shouldn't have even been evictions, during the moratorium. We have to look at where is some of these increases really coming from. We're not really talking about small landlords here. We're talking about great bigger entities, corporate entities that are driving up some of the most amazing rents.

Melissa Harris-Perry: Heather, I'm just going to say, can you weigh in on the rent issue?

Heather: We have to. The price of milk is one thing, but rent is usually a household's biggest cost. It is the biggest, it's the most widespread area that's seen the biggest increase. I think we have to, again, as you said, ask, who is charging these rents, who's increasing, who thinks that people have nowhere to go, and why. That's really fundamentally what's happening, is that landlords-- I'm so glad you had a small landlord call in.

That person from Massachusetts is an outlier who's had long-term tenants for 10 or 25 years, and has barely raised their rent, but has to raise wages and has to raise the rent. That's an outlier. What we're really seeing is bigger landlords, more the corporate landlords who have a really significant part of the market, are in cities, but all across the country, saying that basically, because people have been really priced out of a very hot housing market for home ownership because there's just so much inequality.

You have rich people who are buying houses and can pay top dollar, and you have a real crunch in supply of new housing, that folks are just basically deciding they can raise rents and renters have nowhere to go. That's really the question. If you're a landlord and you raise a rent, you have to think, "If I set this too high, will my apartment go vacant?" Because we've got too few homes, too few apartments across the country for the number of people we have, and we've got a real depression in the possibility of a young family being able to buy a home, we've got a real renter squeeze right now.

The solution to that is more housing supply. We are building a fraction of the number of new apartments and housing as we did 30 years ago. Frankly, the Build Back Better agenda that is being held up in Washington would address that head-on. The solution is also to look at where all this money is flowing in terms of corporate real estate holdings. 10% of the country's billionaires are in real estate, and so, there's a massive amount of pandemic profiteering that's going on with the real estate class. The 10 richest men in the world doubled their fortunes during the pandemic, and general billionaires made $5 trillion more during the pandemic, according to new data from Oxfam.

Melissa Harris-Perry: Anne Price is President of the Insight Center for Community Economic Development. Heather McGee is the author of The Sum of Us. Its paperback edition will be ready on Tuesday. Thank you both so much for joining The Takeaway today.

Heather: Thank you.

Anne: Thank you.

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Julia: My name is Julia. I live in Fort Townsend, Washington, and yes, my rent has increased 28%, I believe. I'm an elderly person on a fixed income called social security, and a tiny retirement. I live with a young family of service workers with two children, and it has stretched us all, because, coupled on top of that, is a huge loss in food stamp benefits. It makes life less possible.

Joseph: Hi, my name is Joseph. I'm calling from Worcester, Massachusetts, and my rent hasn't increased, but I'm a landlord, and I've had to increase rent on tenants that have been there for 10 to 25 years because of the tax increase and every increase that I've experienced from utilities and everything. I feel bad about it, but it's just what has to happen.

Ashley Wilkinson: My name is Ashley Wilkinson, and I'm calling from Salt Lake City, Utah. My rent goes up every year, like most people, 3%-4%. This year, it went up 8.5%. I decided to get on Instagram and ask who else experienced a rent hike. There are people in my area and in a neighboring county in Utah who experienced a 50% rent hike, and our incomes are not going up this much, so it's drowning. We're drowning as renters.

Patricia: My name is Patricia, and I just wanted to say with the rents in my area in Richmond that a lot of the policies for rentals include having two to three times the rent, but many jobs are not paying that amount of two to three times the rent, and has really increased the barriers for folks that get into housing.

Andy: My name is Andy I'm from Daytona Beach area in Florida. We had a rent increase of about 20% from 2020 to 2021. They were going to increase from about 20 to 30% again going into 2022. We decided to buy a house because it was going to end up being cheaper than continuing to rent. We weren't ready to do that, but we ended up scrambling and getting the necessary money together to do that.

Fred: Fred from Salt Lake, property manager and realtor with clients who have rental properties. Several of them, myself included, had to sell assets to make up for the discount in rent or the lack or ability to increase. We did everything we could to keep our tenants in our homes. Most of us were more than 90% successful. Now that the rent controls and benefits are off, we're seeing the challenge of people who are still in a tough economy and trying to figure out how to keep tenants in place, and we do that through this pandemic.

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