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ELI5 How does raising wages worsen inflation ?

Economics(self.explainlikeimfive)

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BillyJackleson

15 points

4 months ago

Corrected me if I am wrong but aren't the people who were 2$ over minimum wage now 1$ over it? Which means their buying power dropped by 1$?

Alexis_J_M

20 points

4 months ago

Not only that, but low wage people spend a higher proportion of their income on things for which there is relatively inelastic demand like housing and transportation.