/biz/ - Business & Finance

[Anonymous No.474633]

Raising the minimum wage due to inflation is a catch 22.

We need to raise minimum wage due to inflation which increases the living costs. Yet if we raise the minimum wage it will cause more inflation.

[Anonymous No.474636]

>loaded with assumptions

okay

[Anonymous No.474637]

Unless it's done excessively, raising minimum wage isn't the driving force behind inflation (i.e. it isn't really contributing to inflation if it isn't keeping up with inflation).

[Anonymous No.474643]

If you raise inflation you increase the money supply thus causing a rise in inflation... which can be curbed by the Fed raising interest rates and otherwise reducing the money supply. Inflation however does not necessarily keep pace with the increased wages, and an increase in inflation reduces unemployment. In other words a policy of increased minimum wage is a manageable solution to a down economy if compounded with responsible currency controls.

However from your phrasing I take it that you have no higher level education in economics, and thus nuanced explanations of economic policy tools are wasted on you.

[Anonymous No.475673]

>>474643

> an increase in inflation reduces unemployment.

No. High inflation can happen concurrently with high unemployment.

[Anonymous No.475679]

>>474633

Inflation is always and everywhere a monetary phenomenon.

You can have rising wages even in a period of deflation. For example, the average farm wage in Virginia in 1830 was $6 per month. By 1860 that had increased to $11.43 per month - an increase of 90.5%. During that same 30 year period there was deflation amounting to -6.25%.

[Anonymous No.475681]

>>474633 (OP)

Inflation is always and everywhere a monetary phenomenon.

You can have rising wages even in a period of deflation. For example, the average farm wage in Virginia in 1830 was $6 per month. By 1860 that had increased to $11.43 per month - an increase of 90.5%. That same 30 year period saw prices fall by -6.25%.

[Anonymous No.475689]

>>475673
Right, stagflation.

I have a feeling that might happen to us in the near future. When the world financial crisis occured, money stopped shifting hands. So, in monetary theory, MV=PY, the V variable (the velocity of money) decreased. To avoid deflation (a decrease in P), we responded with Quantatative Easing, increasing the money supply M. This increase in M will result in a huge increase in P whenever V actually picks up.

Translation: When there's even a modest true recovery for the US economy, there will be BUTTLOADS of inflation. So, assuming we don't have some new boom in the economy within the next 3 years or so, we can expect our next expansionary period to include modest returns at best and high levels of inflation. Sounds a lot like stagflation to me...

[Anonymous No.475704]

get real, guys, inflation is everyone being greedy and selfish and for all the wrong reasons

i'm paying more for the same thing, I'm not getting more of it, I"m not getting a better quality, it's still the same thing but now for a higher price, fuck

from 2005 to 2008, gas prices doubled in the united states, why the hell did that happen? Economists say "robust world growth and higher demand particularly in china" well what the hell, man, raise the prices over there, don't punish the u.s.!

I used to do business with a local air conditioner company, small mom and pop kind of thing, good service, fair price. One year, I needed some mantainence on the air conditioner, called the guy over. Before he started work, he informed me that there was a price increase. I asked how much, he told me, holy shit, that's a huge increase! He tried to feed me some bullshit excuse, gas prices are going up, blah blah blah, but I wasn't having it, even if gas prices tripled that doesn't justify such a huge price hike, what the hell is really going on? He finally admitted the real reason...his daughter is going to college and he needs more money for her tuition. I about lost it at that point, completely blew up. I told him if he wants to pay for his daughter to suck dick and get fucked in college, do it on his own dime, not mine! (he left angry, but came back two months later to apologize for the price increase and to admit that I was right...he became suspicious of her, set up a spy camera and caught her getting her brains fucked out, now he cut her off financially and he's saving a ton of money thanks to me, I told him he's welcome. )

the point is, only people with a degree in economics should run a business, everyone else doesn't know what the hell they're doing and it shows, bunch of greedy bastards.

[Anonymous No.475714]

>>475673

It can, but it doesn't usually happen.

[Anonymous No.475755]

>>475704

[Anonymous No.475763]

>>475704
Sure, good boy.