It always amuses me when people suggest that they should simply increase wages to solve economic issues, that seems a bit too simplistic.
shareIn Australia, our wages have remained stagnant while the cost of living keeps rising. We have a lot of "working poor" struggling to pay bills and put food on the table.
sharein lots of cases, probably.
it depends on some other factors, like competition within the industry, whether the item being sold can be substituted with a similar item that doesn't have the same inflationary pressure, etc.
personally i am against minimum wages, but not because they lead to cost increases. i'm against them because they are very punishing on poor, young, uneducated people. they price disadvantaged people out of the labour market in many cases.
I love it when people say the minimum wage can't feed a family of four. It's supposed to be for people starting out in the work force, not heads of households with children.
shareMinimum wage was brought in as the minimum wage a worker could earn to afford the necessities of life. It's greedy capitalism that has you thinking that it's just for teenagers or new workers. Why is it that up until the 80's an average family could survive on one income, and a lot of times that one income was some sort of retail.
sharea few quick comments to that:
- it was mostly capitalism that people were living under until the 80s as well, so if we're looking for reasons for why things seem to have changed, i think we need to look a little deeper than saying 'greedy capitalism.' people were greedy in the 70s. people were greedy in the ussr & cuba. i don't think greed is unique to any particular system.
it's true that free markets can reward greed. but all kinds of totalitarian systems reward greed too. what matters to me, & i think this is what should matter to everyone, is how most people do, the people who are not rich. & when we look around the world, the only people who have escaped from the complete, total poverty that has defined most of human existence are those that live in areas where there are free markets & mostly free trade.
if we accept that a family can no longer survive on one income, then we need to ask why that has happened, and what costs are causing that to happen.
if you look at the chart in the link below:
http://www.aei.org/publication/chart-of-the-day-or-century/
you'll see that many of the common, most widely used products in our life have become much more affordable. tvs, toys, computers, cell phones, even clothing and cars have decreased in cost compared to the rate of inflation.
i'm sure the people & the companies that work in those industries are just as greedy as those that work in childcare & education. possibly more greedy. so i don't think it is sufficient to just say 'greed did it' and cast blame.
in fact, if you look at where costs have increased the most - hospital services, college tuition - it is in the areas that are most regulated & prone to the highest levels of government interference.
i'd suggest that's a better place to look rather than just blaming greed.
If what you suggest were true, that wages and inflation move in lockstep, there wouldn't be inflation. They are different things. Inflation is the cost of goods vs the value of the dollar. America is a much more expensive place now than it was 30 years ago in ways that inflation doesn't measure. For example my kids go to public school, they no longer have physical books and access their lessons through the internet. They use phones in class instead of computers. This is because Republicans de-funded education. If my daughter didn't have internet or a phone, her grades would suffer and she might even risk failing classes. Republicans de-funded transportation and some routes were cut so now we have to drive her to school. I don't agree with it, but that's the world we live in. I say that because people will say that cell phones and internet are luxuries, they aren't, they are necessities in my world. Safety regulations have made cars safer but way more expensive vs the dollar than they used to be. Houses are larger. Employers require people to have mobiles but won't pay for them. My state doesn't allow age discrimination so auto insurance is more expensive for adults than other states. Corporations keep more profits, give fewer raises, have cut bonuses and profit sharing, hire fewer people, and make cheaper product. Automation has replaced high paying factory work. My wife left her last job because they hadn't given raises since 2008 yet they have a lot of money for other things, just not wages. On top of that the CPI which measures inflation is fantasy.
shareone other point i should have mentioned earlier: if the wages increase, sometimes you'll see people replaced by automation. we're seeing this a lot in cities where min wage increases have resulted in fast food restaurants decreasing employee counts & increasing automated kiosks, for example. so that may not mean an increased cost to consumers, but it does mean fewer jobs available to young & low-skill workers.
shareNot necessarily, but higher wages very well might be offset by layoffs and everything costing more.
We've got to figure out a way to get the cost of living down. That's why it still feels like everyone's struggling even if the economic numbers are good.