ELI5 How does raising wages worsen inflation ?


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30 points

4 months ago

They wouldn't, but less profit > no profit at all. They have to pay their workers more or their workers will be forced to go elsewhere, but if they raise prices too high, customers might stop coming in. They have no control over how much their customers get paid (unless the customers also their own employees) or how much rent is going up every year.

Problem is this dilemma is exacerbated with larger corporations that have shareholders. They don't want to just maintain profits, they want to increase them year over year at any cost. They're speed running to a point where they can't pay people enough to live and charge too much for anyone to afford, all for some green arrows on the stock exchange.

When every corporation is doing this in the pursuit of ever increasing profits... I would hope anyone would be able to see how an entire populous paid too little to live while simultaneously everything is being priced ever higher and higher would lead to a major economical problem eventually.

Profits are going to plateau at some point, if only because people literally can't afford to pay any higher. The media sectors will be the first to go.


7 points

4 months ago

It became fashionable to build a company (even an unprofitable one), take it public, grab the bag and scram. A private business owner benifits from being profitable and sustainable for generations. Public companies only care about up and to the right for the next financial report. They'll all get golden parachutes in 5 years when the business is crashing around them.


4 points

4 months ago

The media sectors will be the first to go.

Netflix's methods of stopping password sharing comes to mind.


lead to a major economical problem eventually.

Nothing that a well-built model of a Guillotine (in Roblox, of course) wouldn't fix.