Facts Fight Back: Will Wage Rises Cause Inflation?
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- Опубліковано 12 тра 2022
- You might have noticed there has been a lot of discussion suggesting that increasing wages would cause inflation.
The argument that wages rising in line with inflation (or just above it) will cause a 'return to the 1970s wages spiral' ignores basic economics and the advice of the government's own Treasury Department.
Deputy Director Ebony Bennett explains, in the latest episode of Facts Fight Back.
Well done Ebony. Thank you The Australia Institute.
As best I can recall, a consequence of the inflation was a more balanced economy. My wife and I bought a block of land in 74 and had a house built on it. Post inflation, we had a decent amount of equity and could engage in the activity of making babies.
Inflation now could do much to rebalance incomes with mortgage repayments.
They know this but we are dealing with neoliberal governance a governance that loves to keep wages depressed with austerity ! We have had an economy on life support for 12 years after the GFC and they still peddle their BS!
The whole neoliberal trend in macroeconomic policy. The essential thing underlying this is to try to reduce the power of government and social forces that might exercise some power within the political economy-workers and others-and put the power primarily in the hands of those dominating in the markets. That’s often the financial system, the banks, but also other elites.
The idea of neoliberal economists and policymakers being that you don’t want the government getting too involved in macroeconomic policy. You don’t want them promoting too much employment because that might lead to a raise in wages and, in turn, to a reduction in the profit share of the national income.
The neoliberals have been feeding this mantra for 50 years!
A load of good on ya Ebony
Paul Keating said that people could not get the 3% pay rise, when kelty and unions asked for it. Keating said that putting that much money in the economy would cause inflation. So why did we hand over 3% of our wages when wages rises don’t necessarily cook the economy. Obviously we now have to hand over 12% of wages
But how would they increase the wage when they have to pay for the investment made buying that machine to increase productivity?
Short answer???
If that were true, prices wouldn't have increased in the last decade.
"Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Milton Friedman
And thats not true at all. Lets take a look at russia invading the Ukraine.
Many european countries importing russian gas now importing less, which increases the price of gas in european countries.
And thats not a monetary phenomenon!!
So in other words yes, raising minimum wage causes inflation, but productivity growth will curb it.
Someone needs to explain this to the British government and the Bank of England!
They know. Someone has to explain that they know to people.
Sure Ebony....next thing you'll be telling us that government debt is not the same as household debt, lol!
Using GDP as the measure for production growth is an error.
First, it includes income. This is circular. Income goes up, so GDP goes up, so it is balanced.
Second, it includes government spending. The government is not a producing entity and does not contribute to production at all. Especially when the government is printing money for people who are not producing to increase the income of people (increasing the GDP).
You should be utilizing manufacturing statistics. They are available. With a shorter time frame (2 years) and using proper statistics, I believe the numbers would argue against this stance.
i swear u people will do anything to try to make the boot ur lickint taste saltier
@@Jack-px8lf they're conservatives. They wanna be poor and return to they're heritage, aka poor surf farmers in a Field
@@NoNo-vn8de well one, being a farmer versus being a serf is totally different. theres more honor in being a peasant or serf than being a farmer.
@@NoNo-vn8de also they're not conservatives they're just mistaken there's a big difference like its reasonable to question this. op just doesnt realize that when we look at manufactuing statistics we do see an increase in production anyways and automation. the sign of a well functioning society is the government spending money to help people have an income when production is going up due to advances in technology and automation and there being less bullshit jobs that dont need to be done by people. op just thinks if society is fully automated and collective gave everyone basic income in communism, that somehow that would be bad and not indicate a good society even though it would arguably be a utopia. he thinks a better indication of production and societal progress is as many people filling as many bullshit jobs as possible and manufacturing as much bs as possible with there not being any government spending. he for some reason thinks pointless human labor and over manufacturing to fuel consumerist ideal of never ending 'economic growth' is more of an indication of societal progress than automation and ubi. its not conservatism its just ignorance and being misinformed.
@@Jack-px8lf yeah man working to provide for yourself and your fam for a living Vs slavery to a master. Ones based and ones cringe cuck behaviour.shall we flip a coin?
Where does this race to the bottom end?
That relationship already exists, what I’m assuming your arguing is blanket wage increases to include industries where productivity has not necessarily increased. Also why not include recent margin compressions with your data?
Just because you pay someone more it doesn't mean someone works harder thus productivity will go up. The reference to a solar panel factory getting a new machine, which would increase productivity, is about company investment, NOT wage increase
productivity is already up dumb dumb, companies are basically getting the surplus value that could go to our wages.
Funny how Marx figured this out like 180 years ago
So wage increase causes price increases?
AI is taking over.
There is no productivity growth… there is productivity decrease, also due to inflation. Economy isn’t growing. The increase in wages are mostly paid for by debt, which increase the money supply, and pump up inflation.
Only aussie math gets this conclusion
If I listen to you I'll be broke
I bet you will!
This is false. Productivity is increased thanks to company paying for something and risking for it with money. And productovity makes usually the job easier. Now you want people to be paid more for an easier job? That is a bad trend.
Unless the machine you're refering to works automatically, you need workers to operate it. No machine can operate automatically without some worker's input, wether it is physically operated by a worker or programmed by an engineer.
So the increase in productivity is only possible with the help of man power. But the profits of the increase in productivity stay in the owner's pockets.
Without the workers the owner couldn't make any profit no matter how much he invests in the company. Why should the owner be the only one that benifits from the increase in profits?
This mentality only serves the owners, and unless you yourselft own an enterprise, you're only hurting youself and contribuiting to inequality which intern hurts everyone else.
@@ivanbastos4963 because the owner takes the finanacial risk? And the employ has easier job than the last time he didnt have that equipemnt and its more a joy of him to work? In practice it works. In theory a lot of things seem to work but that aproach doesnt. The owner should have a curve or risk to reward higher than employ because he takes a higher risk. Risking your house because of lack of funs doesnt sound soo promising. Not all companies are equal there are easier ones and harder ones to operate. And lower curves of returns for some companies example is pretty much all ticket private selling places, that are not goverment supported.
Further more Productivity increases are not possible without technological advancement. Contrary to popular belief private Business cannot afford the long term investment required to drive technological development. This is done overwhelmingly by universities and other PUBLIC funded institutions like the military for example. Private industry buys the patents after the fact its not the company taking a risk to push tech forward its the PUBLIC. We also pay for all the infrastructure and institutional apparatus to have a a god forsaken company in the first place. Companies have zero risk besides bankruptcy and with modern subsidiary accounting that's not even a risk because when one arm of a multinational becomes insolvent its simply written off of bailed out again BY US THE MOTHERTRUCKING WORKING CLASS THAT BUILT LITERALLY EVERYTHING EVER.
So then we build everything, we design everything, we conceive the very concept of an economy in the first place. We educate, raise and care for the children that will become your worker drones in your uninspired hackneyed company. We slave away year after year, seen or unseen. Payed or unpaid and then you capitalist dogs have the Nerve to turn around and talk to us about PRODUCTIVITY AND RISK.
@@edgelordcutting some people have bought capitalism's propaganda so hard that they view private investment and growth as paradigmatic dogmas and can't physically put their views under an unbiased analysis
But how would they increase the wage when they have to pay for the investment made buying that machine to increase productivity?