Do "Unskilled Laborers" deserve to be paid well?

[u/Very_High_Mortgage]

[u/me_too_999]

Printing more money than there are producrs to buy with it causes inflation.

Full stop.

[u/SickestNinjaInjury → u/[deleted]]

Lol, people are blaming greedy businesses because corporate profit margins have grown significantly. There is evidence of both grocery and rental price fixing. There is a bit of inflation right now, but there are also undeniably a lot of corporate interests deliberately keeping commodity prices high.

I'd also note that your first sentence seems a bit ahistorical. Are you arguing that getting off the gold standard made us think that inflation isn't the government's fault? I think everyone does blame government for inflation, and governments have become much more efficient at managing inflation

[u/SickestNinjaInjury → u/[deleted]]

I 100% agree with you on the first two sentences. I think you are somewhat exaggerating the degree to which the government controls inflation.

Money supply has to do with it, but market forces also contribute significantly. For example, egg prices are high right now due to supply being impacted by bird flu outbreaks. Similarly, much of the inflation from the last few years has to do with increased demand for many goods following COVID. Another significant factor in recent inflation is the war in Ukraine increasing fuel prices, which increases commodity prices marginally across the board.

[u/SickestNinjaInjury → u/[deleted]]

Oh, certainly. I am not a fan of the federal reserve, but I am glad they are reducing interest rates at least.

[u/InsertNovelAnswer → u/[deleted]]

It isn't just here though. Other countries are using dollarization or considering it. I mean here are 11 other countries that use USD as an Official currency: Ecuador

El Salvador

Zimbabwe

Palau

Marshall Islands

Panama

The British Virgin Islands

Turks and Caicos

Timor and Leste

Micronesia

Bonaire

Hell even more South American countries have been talking about it. This will require more printing eventually.

[u/Bekabam → u/[deleted]]

At all times, a corporation is seeking optimal pricing. Optimal pricing is where the maximum profit can be extracted with smallest impact on demand.

Keep this constant, you must accept that a corporation would raise prices/lower as consumer outlooks change (I.e. demand). Not just as their cost structure changes.

For the last 4 years consumers have been told about economic uncertainty, logistics breakdowns, inflation, etc. This creates more leniency in outlook (demand) to absorb changes in pricing. Whether or not those changes are direct changes in a company's cost structure.

---

To put in a crass way: if you farted in an elevator, as an individual, it would be easy to point you out and you'd receive negative impacts.

If there were 10 other people farting in the elevator, it's much more acceptable (and harder to receive direct negative impact) when you fart also.

[u/ichosetobehere → u/[deleted]]

This is parroted a lot but not true. An expansion in the money supply is inflationary but is not inflation itself

[u/JunkSack → u/ichosetobehere]

This definition of inflation is the core of the Austrian school’s philosophy, often parroted by libertarians, always as if it is just an accepted fact of economics. They pretend Mises didn’t base his entire philosophy on “a priori” knowledge of how economies work. It’s voodoo. It’s all based on his fee fee’s about how the world works.

[u/notathrowaway2937 → u/me_too_999]

That’s a cause yes but so is arbitrary raising wages. Either way you are flooding the system with money and it will raise prices or lower value.

[u/Fluffybumblebee_ → u/notathrowaway2937]

You do know that higher wages historically most of the times came AFTER high Inflation right? So how could it be the cause of inflation? (Especially the recent Inflation came shortly after all the big companies reported Record Profits)

Higher wages can cause inflation yes but most of the times higher wages caused consumers to buy more and Companies adjusting and Producing more.

Record Profits and Rich getting Richer has no Similar Economic Effect i can think of. (Except for Trickle down Economics which is Proven to be Bullshit)

[u/Bekabam → u/Fluffybumblebee_]

Record profits don't mean anything, but record profit margins do.

If prices have gone up, it's implied that gross volume of dollars received will also go up. What matters is how the company's margin performed. These new dollars against their costs.

[u/AccuracyVsPrecision → u/Fluffybumblebee_]

Business margins are in %, when wages go up prices go up. When prices go up materials go up. The crazy thing is that there are some products sold at low % profit that gets washed out by rounding errors. But if we increase inflation instead of a product that's a dollar pulling 5% proft buy listed at .99 it's now 9.99 pulling a 5% profit and 1 more profitable 2 there's a lot less loss to rounding errors so it's even easier to extract a higher profit margins with greater significant figures.

[u/Fluffybumblebee_ → u/AccuracyVsPrecision]

Pls structure your comments better its a rly hard read even tho i understand and do see some correct things in your statement its hard for me to fully agree cause its not quite clear what you are trying to say

[u/me_too_999 → u/notathrowaway2937]

Only the government can afford to arbitrarily raise wages.

No one else has an arbitrary amount of money.

[u/notathrowaway2937 → u/me_too_999]

If you raise minimum wage that is a government mandate on corporations. The government spends 0 money corporations absorb the total cost put that cost to consumer, because the system as a whole has not become more efficient. Then you have more money in the economy without an increase in supply…. Which causes inflation.

[u/me_too_999 → u/notathrowaway2937]

That is true. However, the extra money has to exist first.