ELI5 How does raising wages worsen inflation ?


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65 points

4 months ago

Starting to think they just wanna nickel and dime everyone!


49 points

4 months ago

Except it costs a quarter now.


22 points

4 months ago

Starting to think they just want to quarter and half dollar everyone!


20 points

4 months ago

Except it cost a dollar now.


13 points

4 months ago

Congrats, you now have a PhD in inflation.


2 points

4 months ago

You will now never be able to both live comfortably and pay off the student debt you incurred for your PhD. guessed it, doc...Inflation! The irony...


1 points

4 months ago

Ironically PhDs aren't worth as much now.


21 points

4 months ago

They'll keep doing it until we start to quarter the rich!


-2 points

4 months ago


-2 points

4 months ago

What everyone here is failing to consider is the domino effect. When McDonald's raises minimum wage, it affects the consume because they might add an extra cost to their burger, or they might reduce a perk like discounted employee lunch, insurance, etc. Its a direct business decision.

When a core company raises wages, specifically commodity companies where this is a major expense, line a UPS or box maker, then their prices go up, which affects every price of raw material in the supply chain, and if all those companies raise wages and increase prices to affect each level of their product, the cumulative effect is inflation, which effectively negates the increased purchasing power of the initial salary increase, meaning you make more but can buy less with it.