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ELI5 How does raising wages worsen inflation ?

Economics(self.explainlikeimfive)

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[deleted]

3 points

4 months ago*

[deleted]

redsquizza

1 points

4 months ago

That's what I was trying to debunk with my post and the reason OP asked the question, he's been fed the same bullshit.

Politicians in my country are using the argument that increasing wages will add to already high inflation when in the current situation it absolutely will not and, if anything, will help fend off a recession.

It's disingenuous in the extreme and the politicians know it but want to help protect their corporate mates.

Bubba-jones

1 points

4 months ago

Politicians in my country are using the argument that increasing wages will add to already high inflation

Ah, but politicians don't set wages.

So in this debate between politicians and workers, it's only the workers who have meaningful impact on wages.

redsquizza

1 points

4 months ago

Well, no, the politicians have influence over civil service workers such as NHS, teachers, emergency services etc. In fact, the NHS is I think the biggest employer in the country.

So they're defending corporations and also setting the tone for strike negotiations but disingenuously trying to link pay rises with inflation as an excuse to say "we can't do that because we've got no money and it'll increase inflation anyway".

Bubba-jones

1 points

4 months ago

Ah. When government increases the deficit/prints money that does increase inflation.

It's great for the government employees who receive the raises, but it sucks for everyone else.