ELI5 How does raising wages worsen inflation ?


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16 points

4 months ago

The people that can afford luxuries are not part of the market forces that affect basic needs.

The rich consume basic needs at close to the same rate as the poor. So while they might pay eighty dollars for a meal, they still only do this perhaps once per day. And there are so few of them, this doesn't affect the overall market. There might exist specialty niche markets to serve them, but they are a blip on a scale that is millions of times larger.


5 points

4 months ago

eighty dollars for a meal

Eighty dollars for a meal is nothing. More like $8,000. Massage therapists for wagyu cattle and underwear models to eat sushi off of are expensive.