The Contentious World of Inflation: Why People Don't Agree on It
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- Опубліковано 8 тра 2024
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**CORRECTION! At 8:00 we mention the term "Stagnation," when it should be "Stagflation." Sorry for the mix up.
We've all heard about inflation to some degree, but you may not be aware of just how contentious the topic really is. Today, we try to explain why that is.
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You are missing one point about Japan, just because prices has fallen while the central bank was printing money does not mean prices would not have further if central banks wouldn’t intervene….. 10:59
I remember a quote on the side bar of r/badeconomics: "You know what the problem is with being an economist? Everyone has an opinion about the economy. No body goes up to a geologist and says, 'Igneous rocks are fucking bullshit."
this comment really resonated with me.
Oh no, economics is a social science, who knew that!
@@Acid31337 I mean if there can't be controlled experiments and exploration you can't actually know anything, so in 2021 it's pretty safe to say that we'll pretty must not know anything new about most macro econ.
"Get out of here, you sedimentary rocks fanboy"
You wish. Anti-science gains speed every day. Flat-earthers and young-earthers get millions of views. And yeah, they argue even about geology. And now they're doing damage in tangible ways, moving into anti-vax. We've had that for 1000 years and boom in the trash.
"I don't have a problem. I can quit QE any time I want." - Governments
As we're now in QE infinity since 2008. Start tightening and the whole Ponzi scheme collapses, but not before wealth transfer up to top 0.1% is complete.
Greatest comment of the week!
What would you suggest we do instead? Laissez faire economic policy?
@@aBusybee agreed here. QE seems to have been the best bad option.
@@aBusybee Bitcoin, problem solved.
Economics: not very sexy.
Plain Bagel: I’ve got music to fix that.
well, we **are** all about to get fucked.
Oh yes! That music stimulated my package!
Richard: "Quantitative Easing is _intended_ to be temporary."
Papa Powell: "Hold my money printer... brrr."
"Nothing is more permanent than a supposedly temporary solution"
Word I heard back in programming class
“Papa Powell”🤣🤣🤣🤣🤣🤣
"Every 35 years, prices double"
Argentina: Those are rookie numbers...
Iran , hold my balloon
Venezuela: Are you sure?
lebanon: hhahahahaahahhaahaha
Zimbabwe: hold my one trillion dollar bill
Sad about Treasury Secretary saying "relationship with inflation" when "reflationship" was right there
No it was not, thats terrible
Can we talk about how Munchkin was one of the top bankers that poured gasoline on the fire that led up to the 2008 catastrophe?
Monetary-policy-induced inflation is a backhanded way to tax people to pay for those services that the government isn't paying for with more "traditional" taxes.
Great point! I really wanted to expand more on the "taxation" aspect of inflation, because it really demonstrates how we indirectly pay for the benefits of inflation, but I was already at 15 minutes trying to cover everything else haha.
@@ThePlainBagel you definitely covered it with some of those quotes (i.e. everyone wants what causes inflation but not the inflation). Well done as always, Richard!!
I'm in between two jobs so binge watching finance video is ACTUALLY my favorite past time these days 😂
Is it past time if there's no other time?
Sounds like you need better skills... working one job is too many
@@stachowi Unless you find working fun, which most do.
Different kinds of skills will get you money in different ways though, most will include jobs and that’s honestly okay. That doesn’t make them bad. What makes it bad is if you have a job you don’t like. That’s usually when being smart with economics comes in handy… often to let you pursue a job you’d like to have.
But this also just may be me.
Best advice my idiot brother ever gave me: 100 dollars today is NOT worth 100 dollars tomorrow.
so what you’re saying is I should spend $100 on video games? okay!
Unless .... you spend it in Panama. 🇵🇦
@@whisper3856 or just invest them
@@mariodimitrov8185 No. The stock market is not immune from inflation. In fact, stock prices being at an alltime high is more indicative of a market crash.
@@biggiec8224 who tf said anything about stocks lmao
Do a video on the difference between Venture Capital,Hedge Fund, Private equity and Institutions since people mix them up often
If that is true then the requirements to invest should be stricter lmao
The quality of content here is insane! Thanks Richard. Also happy to see the original Bagel intro back :D
I love the way you present your non-bias content! Thanks
love the presentation of both sides of the argument! Awesome video, keep up the great content :)
Schweser's content for CFA level 1 couldn't be made simpler than this.
Amazing video! Your ability to present all sides of the argument without showing your stance on the matter always amazes me, Something I strive to be in my videos and comments. Cheers from Oklahoma
Well done! Two things I would add to the demand pull and cost push framework are the unique role of inflation expectations and exchange rates.
I wish you were my economics teacher, you keep it very interesting all the time, great channel!
This man deserves more subscribers!
Hi Plain Bagel. Really love your videos. Putting some closed captioning on them would help make things a lot more accessible to my hard-of-hearing friends.
The video is succinct and excellent but just wanted to tell you this is my personal favorite background of yours 😄
Enjoyed the video. One thing you didn't touch on was the impact that inflation has on debt, which I think is pretty relevant considering how much debt the average American has. Generally speaking individuals and companies that have financed assets that make up a large portion of their net-worth stand to benefit quite a bit from inflation as long as their income keeps up with it.
Thanks for such great content!
objective point of view, great content!
Great job and pretty much sums it up. Special respect that even Austrians got a chance in your video.
Top notch vid man
Your peanut butter example was so low-key spicy and I appreciate you for it.
BagelBoy is back! Humor is on point in this one.
why is this guy not blowing up, his videos are great
Congratulations on your 401k (subscribers) 🙃👍!
A 5-minute history lesson of Venezuela crazy inflation will be a awesome video to watch. Good job Plain bagel.
Great video effects quality!
I see you identify as an Apache Attack Helicopter sir
Thanks a lot ! very informative ! :)
Super useful and educational. Thanks!
I can already sense this video being played in an Economics class haha. Nice stuff
Great video Plain Bagel, I enjoyed this a lot more than your last few. Felt like you got about the right level of detail on the topics. I'd have liked to know a bit more about different methodologies for calculating inflation like CPI vs RPI etc. but maybe something of a topic in itself. One thing though, I don't know what sits at your left knee but I guess it's your script; I think investing in an autocue might help you get a more professional gloss. Cheers anyway!
Well. There's my CFA level 1 econ syllabus summarized. Great video as always!
Love your videos! Would you discuss how oil industry is looking, especially if electric cars become really big over the next few years?? I’m really curious what might happen to that industry and how it will effect other things 🤔
I love how reasonable you are when disucssing these heated topics. Inflation is a very complex issue and one thing people (living in rich countries) often forget is that it is closely related to the material conditions of an economy. Which is an issue, because most studies consider the reality of a rich economy when proposing solutions for poor economies.
Regarding the CPI, we've a very interesting case here in Brazil. We have two main indexes, IPCA and IGP-M. The main difference is that IGP-M places a lot of emphasis on the price of goods paid for by producers, sort of like the PMI. In a poor, largely agricultural economy like Brazil's, it reflects very heavily on wholesale prices or, in other words, basic goods (the ones that we current produce). On the other hand, IPCA is a standard index, much like the CPI.
Both of these indexes tend to move in similar fashion, but during the pandemic they got WAY out of hand. The IPCA index measures a general basket of goods, which include electricity, internet, leisurely activities but also, food prices.
Since the pandemic caused the price of the USD in Brazil to skyrocket, and policies that would guarantee a minimum amount of agricultural production had to stay in Brazil were suspended, producers simply chose to export most, if not all, their produce.
So what happened is that the IPCA did not reflect these massive price increases in essential goods like food, because the prices of other goods like leisure and others were dilluting this change. On the other hand, the IGP-M, which more closely tracks the price of essential goods, skyrocketed.
While the IPCA index would be around 15% a year in 2020, the IGP-M reached a staggering 40% - 50% change.
The big, big issue here is that the Government made a political choic to insist prices were not going up because the IPCA index is the offical gauge, despite clear evidence to the contrary as hunger and food insecurity became widespread.
I'm sharing this not only to illustrate how complicated an issue it can be, but also to emphasize what your friend said: economics is a social science, so debates are never really 100% settled. Moreover, I'd like to add that, because it is a social science, it is also a POLITICAL science, as it closely related to how power is exercised and how it affects the lives of an entire population.
Great video as usual!
I am an immigrant since 1962. My first wages were $3/hr, modest new car $1,800, gas $0.25/gallon, a modest attached house near Chicago $25,000. Now today. Entry-level wage $15/hr, modest car $25,000, gas $3/gallon, a modest attached house near Chicago $300,000.
You will note that everything goes up 10x except wages about 5x. I could talk about medical expenses which skyrocket. The cost of entertaining my son at a museum went from zero to $25 plus ridiculous parking fees, etc. Taxes went through the roof. It is worse in Germany where I came from.
very informative videos
Perfect.. I am just studying microecon for my CFA level 1 exam, and your animations are way better than Kaplan Schweser's crappy ol' slides!! Thanks Bagel!
All the best! I’ll write next year 😬
@@kalvinsupersexyndlovu8855 Instead of buying Schweser, go for PrepNuggets. I just discovered them a few days ago, my studying improved a lot - they have colorful animations like Plain Bagel's videos. I would recommend it 100%. Not sponsored, they're just that good
Excellent video.
Any chance you might be able to do a video on CFDs? It's something I've heard much about, but would really appreciate your explanation - and, more importantly, your views on it!
Deflation is the only solution. Deflationphobia is cringe. It even fixes over consumerism and polution issues!
People can't pollute or consume if they die from lack of government stabilizing
@@yanDeriction " they die from lack of government stabilizing"
Did you even think before you typed that out? Literally no one dies from this.
@@ExPwner People die when the cascading effects of liquidity crisis causes needless mass unemployment.
@@yanDeriction none of that is a thing in reality.
@@ExPwner We don't hear about mass unemployment because it's literally the state of human society for all of history. Now is the exception.
Fantástico! Thanks a lot!
Do a video on modern monetary theory, this is directly related to this video.
Better known as More Money Today theory.
Oh you mean Magic Money Theory.
The print More Money Theory.
But when you call out MMT'ers for inflation problem, they answer like China government about Tiananmen square: 1) nothing happened on square = MMT is just description of current system, not policy advise 2) China government is not responsible for that = MMT of course WILL NEVER create inflation problem 2) they deserved it = inflation is not a problem
🤡🤡🤡
Do you know what Keynes's argument for government involvement even if the economy will rectify, long term?
'In the long-run we are all dead.'
He was such a optimistic man wasn't he...
Economists can't be optimistic. Or shouldn't be.
@@josephbrennan370 Very true
Lyn Alden has an excellent article on inflation. I read the entire thing on my channel. It’s about an hour long. Great work as always 💪
I plan on listening to it. You the man Marko!
Thanks for the feedback, I’ll definitely check it out!
What's the link?
And in that hour you became poorer. Not because you spent your money, but because inflation.
Now do a video on the Japanese economy from the 1980s onward, fits very well with deflation
Your videos have an inflation on excellence
I binge the plain bagel all the time…
Deferring consumption through saving, discouraging debt, and putting those resources towards the most demanded projects, will lead to more productivity than artificially higher spending caused by inflation and cheap credit.
You should do a follow up video that expands more on the economy of Japan. They've been doing QE for 30 years. Their debt to GDP ratio is over 200%. And their inflation rate is very low.
Part of this is a currency war between China and Japan, with China targeting Japan's yen (which helped cause deflation).
So is their growth as their government continues to buy up their economy.
The Japanese economy is in permanent decline, and at some point they will reap the whirlwind of all their QE. Perhaps no growth is the end result, but I'm not so sure, as these things take time to work their way out.
Debt to gdp does not matter.
Until people lose faith in fiat.
Thank you for explaining this with the nuance this subject needs. If I have to hear another UA-cam finance video state something like, “the fed caused this inflation by keeping the money printer turned on!”
While this might be part of the issue this is very simplistic and a very complex issue.
Thanks for the excellent videos as always! But I don't like the background music on this one, it was distracting me from your message. :)
The jar of peanut butter got me to like and comment. Nice job bagel.
THANK YOU for mentioning money velocity. Money supply alone is what...hmm...almost ALL?...commentators refer to when discussing inflation.
Really well done.
Money velocity is a temporary thing, inflating the money supply is permanent, so even though velocity can effect inflation in the short term, you really can't treat them as anything like equal, and if people start losing faith in the monetary system, velocity of money can turn on a dime, as once you accept that the money will lose value fast, you need to spend it faster, and that causes economic thermal runaway, as velocity and inflation spike together, and quickly get out of control.
@@sprinkle61 well said. Most people don't get Cantillon effects.
@@sprinkle61 lol no.
Where to begin. Um...
1) Taxation reduces money supply.
Ok I think I'm done.
@@falsificationism Wow, just . . . Wow, but OK, lets look at taxation. The ONLY way taxation reduces the money supply is if the government taxes more than it spends, and then burns the money, so it can never be spent again. Lets see, that last happened . . . Never, that has NEVER happened. Even the last time there was a surplus, the totally repeatable and not at all a bubble year of 1999, they immediately spent that years surplus in the next year, and its been deficits as far as the eye can see ever since then. So, umm, you are NOT done just by saying this thing that has never happened in real life can happen. We can't tax our way out of this situation, because the people will not tolerate the level of taxes needed to balance the budget, and corrupt politicians will always use any surplus to buy votes or redistribute wealth, and never to reduce the money supply.
@@sprinkle61 Wrong again, Bob. The government literally spends money into existence (read the text of any piece of federal legislation to see how this works). On top of that, yep, the Fed and banks also put money into circulation.
I'll be generous and assume you're talking about how things work at the state level?
Would you ever consider teaching on khan’s academy ? You’re doing really well in this video.
TY PB
11:53, I was zoned out for a second and this part freaked me out a little
8:38 Note that the monetarist approach is correct if we assume the velocity of money and the quantity produced to be constant, which is not a good assumption. Just check how the velocity of money has shrinked since 2008 while the money supply has skyrocketed. Also, supposing output is constant is equivalent to say that all or most companies are producing as much as they currently can (full or almost full employment), which is not true.
Also, the CPI doesn't include when company drop the quantity or quality of their product while keeping the price the same. If $1 bought 5 oz of meat, but then that same package shrinks to 4 oz of meat for the same $1. That's still inflation
That's not inflation. Inflation means a generalized increase in the price level. An individual decision to increase price of a product does not cause inflation (except for certain monopolies and cartels).
You made a good point on that the CPI doesn't take into account stuff like the quality or the quantity per product (number of servings, uses...). Nor does GDP. But remember that also the reverse is true: the CPI doesn't take into account the improvement of products. A $200 smartphone today is much better than anything we had ten years ago.
@adrian that is inflation. It's a reduction of one's purchasing power.
The confusion about inflation is often caused by people including economists confusing prices rises with inflation. The reality is inflation drives up prices but prices do not drive up inflation and this is clear if you understand that inflation is essentially an increase in the money itself.
When everyone is watching finance vids , it’s going to be over soon
Inflation is increase in monetary supply of a country resulting in decreased buying powered or alternatively increase in price.
Content, great! 👍🏻
Background music volume is inflated. And, is met with great disdain.
I'm very glad you didn't say that "inflation is good because people will save instead of spend their money if they can get a passive return on idle money" that is the line on several top search results.
2% deflation won't cause people to stop spending any more than a 2% savings account will, as was the case a few years ago.
Inflation is always in itself a bad thing, its just often a justifiable expense to prevent worse outcomes.
You made the point I wanted to make. Cheers.
Its only justifiable in the case of a defensive war, and even then the outcome will be a loss for the people, although maybe not as bad as being conquered. For any other circumstance, another logical choice would almost always be better than inflation. Take the pandemic, They could just as easily had only the elder care facilities lock down, and the rest of us just use distancing and masks and go on with our lives. That might have lead to a few more deaths, but death is a part of life, as is random diseases. It would have been entirely reasonable to not inflate the money supply here, and most other recent printings were much less justified than the pandemic.
2% inflation +3% output = 100% fine.
Has the austerity side of Keynesian economics ever been tried? Government only steps in when the economy goes down the toilet. Keynes saw that bubbles need to be stopped too.
in my opinion the feds need to raise interest rates...it would take some slack off some of the variables that could lead to a quick heavy correction. also need to start slowing correcting that qe stuff. we have (should have) no more room if another disaster hits.
Could you make a video on "how true when it comes to predictions of growth of Country's GDP by IMF & other institutions to reality."
a track home costs less then 65K to build and the corps are charging over 300k for a home.
I wonder what are your thoughts about the economic situation in Lebanon
You bring up an excellent point that across the board wage increases doesn't increase purchasing power. It's one of the parts of economics a lot of people don't grasp or intentionally ignore so they can berate/steal from/whine about corporations.
But that's only if literally everyone gets higher wages. If wages are just distributed differently it doesn't happen like that
@@tomlxyz even then it isn't that simple as there are no classes. For instance, if a company is forced to raise its starting wage, it will also have to raise the management's wage. Why? Because if the supervisor is paid the same as grunts then no one would want the extra headaches of that job, hence you will not be able to hire the best managers. This process repeats itself upwards.
Also since all costs ultimately come down to labor costs, the rise in overall wages would simply be passed on to consumers. Just be realistic here that if corporate bosses must pay more they're not going to destroy shareholder value and/or be like Warren Buffet and take most payment in shares, they're just going to raise prices.
Minimum wage raises are good redistribution. The poorest people get an increase of buying power per hours worked while the richest people get a decrease of buying power.
@@yanDeriction that doesn't always work as intended as a lot of work is under the table, other jobs are contract work, and many industries will simply appear or disappear based on what people are willing to get paid.
@@samsonsoturian6013 "if a company is forced to raise its starting wage, it will also have to raise the management's wage" Probably not if management's wages are far higher. Also, take into account that there are much fewer managers than (non-management) workers. Extra headaches? Think also about the bunch of benefits (not related to pay) of being in a management position.
>talks about inflation
>no mention of the dangers of deflation
Missed opportunity, Bagel
Probably a whole separate video just for deflation.
You mean the 'danger' of my cost of living going down, OMG, that would be SO TERRIBLE.... But not really. You can own Bitcoin right now, and experience this terror yourself, as everything you want to buy to enjoy life just gets cheaper and cheaper every year !
@@sprinkle61 This is a grownup conversation mate. You are a few braincells short.
@@sprinkle61 i believe it is bad because then nobody would buy anything.
>Title clearly show a specific topic on inflation
>Thinks it's a good idea to mix in not just deflation but a specific topic on deflation
Bruh...
Hi...
Some Countries see that "Capital Flight" happen during an inflation... Maybe you can help us understand this phenomenon...
Thanks man..
Love your channel...
Dr K Azlan.
As someone sympathetic to the Austrian viewpoint of economics, great video! You did a pretty good job remaining unbiased and it’s always nice for an economics video on UA-cam to mention us lol
Inflation is a tax. Whoever 1st is able to spend money first before it gets devalued due to monetary expansion, wins. The US government is always the 1st spender, hence everyone is taxed as a consequence. Inflation is constantly understated to benefit the government in form of lowered borrowing cost and lower yearly cost of adjustment to social security which is in the hundreds of billions of dollars.
Do you think you could make a video on overseas markets and the differences in them from the us stock market. I am not able to trade US due to my location and am interested to see the results.
Hedonics measures the change in a good over time, which can alter its price/value. A good example are computers, that get more powerful and yet not more expensive.
This comment didn't age well
@@Alex-dr6or Explain?
Yes, prices never went up in Japan.
*Costs ¥500 for a coffee...
That's $4.56 about the same as starbucks coffee. So you getting it for market value, talk to us when that hits ¥1000 bro.
@@Ruthless_Robbery I'm aware of how exchange rates work.
@@cosmiccoffee8497 Are you though.
@@Ruthless_Robbery You'd be amazed by the things the idiot on this side of the screen knows about stuff.
@@cosmiccoffee8497 So whats your point in saying coffee costs 500 in japan when its the same price as the US after exchange?
It’s a super efficient method of transfer of wealth from poorer to richer, as the already wealthy can afford to take on cheap debt to gain real assets which is then paid back over time with less value. Debt is the only thing that will get cheaper in the near future.
Its so disguting in the european housing market
These types of videos always fail to cover this. Trying to stimulate the economy by increasing the amount banks can lend just leads to those who are financially literate taking advantage of the opportunity. An economist who cares about the welfare of the country isn't the one handing out loans, greedy bankers are. It's utterly naive to think that this will cause an efficient allocation of resources.
Did you start working out more? Looking good 👍
I've always wondered we actually understand what inflation is
My favorite quote about this is 'If everyone had a million dollars, everyone would be poor'
William Simon seems like an uncorrupt voice to listen too 😂
I remember Jack in the box's big deal in the early 90s. 1 dollar for a taco, small fry and a small hamburger. Junk food but hey, 1 dollar.
11:52 is the stuff of nightmares
Very interesting video about this aspect of the economy. Isn't the economy about the complex problem of life? Life is the real wealth. So, we all as a whole, are solving the problem and we all are parts of the problem (one of the reason this problem is very complex, too many pieces makes harder put the puzzle together ).
You are overcomplicating the issue. The core issue is money represents the value of your time, that you convert time to money by working in a job, and you want to get the fruits of your labor when you later spend the money. The problem of persistent inflation is primarily caused by a centralized entity printing more money, effectively stealing your time, both because your existing currency units are less valuable then when you earned them, and because wages generally lag price increases. - Hold Bitcoin, no one can steal your time. Inflation isn't our fault, or caused by us, its imposed on us by our corrupt politicians, that just print money to buy votes, and impose ridiculous rules on us, like the lockdown, that would never have happened in a world without money printing.
Small amount of inflation is actually good for the economy. If there is a small amount inflation like 2-3%.. if you save money your money values 2-3% less next year, so people try to invest their money, which improves money circulation boosting economy.
If you do an animated version of CFA lv 1 study course and it cost 2k to subscribe. I would even pay for it, explanation too good
Commenting for the algorithm
A healthy economy is where people continuously spend thereby creating more wealth for each other but the reality we dont want to accept is that there is a point where when these people have earned a decent income, they dont want to spend no more and simply wants to savor life, while they will be having children to continues these spending pttern, less and less people would want to have a child as it is now costly to raise a child. So effectively there is wealth left stgnant for investments. USA is an example where real economy is struggling to keep up with the wealth seeking return and so what happens is that we are now in a new stage of bubble, and that is valuing companies in the public, lbo, venture capital market
I read somewhere that the EU is struggling with deflation, how does it affect their economy
One additional benefit of inflation is that it encourages spending. At 0% or even negative inflation then youd be tempted to just keep your money in a bank and outside of the economy. The target 2% inflation rate means that people are more likely to put their money in the stock market, reinvesting that money in the economy rather than just sitting on those resources and not allowing the money to contribute to economic growth.
Justin Trudeau: What do you mean I can't print infinite money bro ???
No need for compilation, if official inflation is 2% you lose money over time and that is it, so you need convert money into something like gold, stocks, btc...
Wages arnt going up. Just inflation. All the money I saved during covid i poured into my mortgage. I didnt save it for an enormous splurge post covid. I plan to try and keep my newfound good saving habits going... I have no guarantee my wages will match inflation as time goes on. I have to assume the worst.
CPI is an okay metric I guess but its too overused and kinda pointless on an individual level, it doesn't take into consideration your biggest expenses like house and car, sure its good to know how much you're spending on food but even throughout ones whole life you only spend like 1% of your wealth on food but a $1mil house can be 90% of your total life expenses, so what do you think matters more
I don't believe your numbers are true when thinking about usual monthly expenses on food people have and how high their mortgage payment is. Given that you don't pay mortgage all your life it shifts even more to daily expenses like food.
When you buy a house the house is not consumed. You still have it and you can sell it. What is consumed is the rent that you pay each month (even if you don't actually pay it, because you're the owner) and this is what is included in the CPI. This is the right thing to do because CPI is a consumer price index. An asset price index on the other hand should include house and car prices.
The reality is humans aren’t pure logic. People would rather make more but have less buying power every year than the alternative of taking a pay cut but having more buying power. We like high scores and want our numbers to get bigger, hence the need for inflation.
I think humans would rather have more individual buying power than their peers. That’s how wealth works. It only works if my labor is cheap relative to your resources. If you have a lot of resources but my labor is bleeding you, no point. This is why a managed economy can be dangerous in the long term. The relative buying power of a country falls.
@@NotShowingOff I agree, but that’s a different topic than inflation versus deflation.
@@rathelmmc3194 it’s kind of not. The wealthy have a lot of money. Even though they have more money, their buying power increases because nobody else can compete with their buying power.
How are you gonna have a pay cut with more buying power? I swear some people shouldn’t have internet access
@@thegreat9481 6% deflation rate, 5% pay cut equals 1% more buying power. Let’s say you make 1 dollar an hour and something costs 1 dollar. With a 6% deflation rate it now only costs 0.94 dollars. Then you take a 5% pay cut so you make 0.95 dollars per hour. You now have 1 cent more than you would have before. Thanks for proving my point though.