Is increase in minimum wage a good method to fight inflation?

[LastKiss]

Over time, I've heard discussions about inflation and the rising cost of goods and services across almost every sector on the world economy.
However, suggestions have been made in various ways on how best to tackle the menace called Inflation. Recently I have personally thought that one of the ways to fight inflation in an economy is to increase minimum wage. More so there has been a back and forth argument on these, as some persons argue that the increase in minimum wage will rise the bar on commodities, because they feel hence you increase the purchasing powers, it will have a multiplier effect on the economy which might be challenging.

So guys, is increase in minimum wage not a good measure to fight inflation. Let's have your opinion.

No it's not, scarcity of goods would be the main factor why inflation always increasing. lots of young people didn't want to dive into the production field because they thought that if they worked on that field they wouldn't get rich fast many young people looked for a way to get rich fast like by gambling, investing, becoming famous, etc. we need a real solution for this and young people should open their eyes that crisis would happen at any time.

You can read this reference: https://www.investopedia.com/articles/markets-economy/090516/what-are-pros-and-cons-raising-minimum-wage.asp

In that article stated "raising the minimum wage believe that higher wages could lead to inflation, make companies less competitive, and result in job losses".

[1714808236]

1714808236

[Arenga pinnata]

Over time, I've heard discussions about inflation and the rising cost of goods and services across almost every sector on the world economy.
However, suggestions have been made in various ways on how best to tackle the menace called Inflation. Recently I have personally thought that one of the ways to fight inflation in an economy is to increase minimum wage. More so there has been a back and forth argument on these, as some persons argue that the increase in minimum wage will rise the bar on commodities, because they feel hence you increase the purchasing powers, it will have a multiplier effect on the economy which might be challenging.

So guys, is increase in minimum wage not a good measure to fight inflation. Let's have your opinion.

I think increasing employee salaries or wages is only useful for helping citizens fight the effects of inflation. And balancing employee needs so that they remain met even in inflationary conditions. Meanwhile, regarding inflation itself, actually increasing employee wages will have no impact at all if it is to overcome inflation itself. Because fighting inflation only has to be done by withdrawing excess money in circulation or increasing the level of productivity of goods needed so that they can still meet everything that consumers need. Because usually inflation is also triggered by the scarcity of a good or commodity. Such as the food crisis and the scarcity of petroleum. So increasing the minimum wage for employees only helps employees survive inflationary conditions but cannot overcome inflation itself.

[franky1]

decades ago in previous inflation's. employers didnt want to move the market rate of labour by increasing minimum wages.. which then impacted costs of goods
what they did instead(especially in america) was incentivise recruits/employees with hidden benefits, such as dental care, healthcare and pension matching

this meant the post tax cost of labour stayed low and employers got tax incentives/rebates by offering the benefits. which helped keep the employers costs down thus kept the price of goods down

employees then got free healthcare/dental which cut down their post tax medical costs. so they had more cash to spend on other things...
.. and thats the story of the evolution of the industrialisation of the medical system

[Peanutswar]

Even if they will increase the minimum wage if the inflation has continuously increasing all of the expenses will now goes high no matter what happens due to products and demand into circulation but if you are just a sleeping giant country you can easily manage those higher prices but of course, most of the country doing an import and export so there's a demand and price action hike. Reason id recommend not sleep your money in just in savings instead while having inflation your money getting a good income flow other than your salary so you don't get too much affected with inflation.

[LogitechMouse]

Re: Is increase in minimum wage a good method to fight inflation?

Not an economist here, but increasing the minimum wage is one of the solutions to at least lessen the burden on the people that they're experiencing. Prices of goods are increasing, food prices are increasing, prices of commodities are increasing, and prices of all that have prices are increasing.

Inflation will not be removed so I guess we can say that increasing the minimum wage will be the forever solution of the government. Well, this is not a one-stop solution because it also has a cons. Increasing minimum wage means higher expense for those business especially those manufacturing companies who are paying lots of employees. How they will cope up with the increase wages? Increasing the price of their goods which will affect us consumers in the end.

At the end of the day I believe this will be a cycle. Inflation happens, government will increase minimum wage.

[slapper]

Raising the minimum wage to fight inflation is laudable. A sophisticated economic dance, not a simple leap. Businesses pay more for workers when minimum wages rise. The natural reaction? Increase prices to retain margins. That's the problem: this can fuel the inflation we're fighting

It's not all bad, though. A higher minimum wage increases workers' spending power, which can enhance demand for goods and services in moderation. Key word? Moderation. We walk an economic tightrope. The execution is harder than the idea. It demands precision, a profound understanding of the economy, and flexibility to alter policy

[ultrloa]

Re: Is increase in minimum wage a good method to fight inflation?

Not an economist here, but increasing the minimum wage is one of the solutions to at least lessen the burden on the people that they're experiencing. Prices of goods are increasing, food prices are increasing, prices of commodities are increasing, and prices of all that have prices are increasing.

Inflation will not be removed so I guess we can say that increasing the minimum wage will be the forever solution of the government. Well, this is not a one-stop solution because it also has a cons. Increasing minimum wage means higher expense for those business especially those manufacturing companies who are paying lots of employees. How they will cope up with the increase wages? Increasing the price of their goods which will affect us consumers in the end.

At the end of the day I believe this will be a cycle. Inflation happens, government will increase minimum wage.

Indeed since for having an increase they can catch up with rising prices of basic needs that's why its important for government to became proactive on this issue so that they will make sure that their citizen will never suffer from huge trouble brought up by inflation.

Inflation will not be taken out for this action but at least the worker have enough funds to cover up their needs. Also at current situation where everything need to do action to create another income stream maybe its best for people to find multiple sources of income so that they will not badly hurt once inflation rate rise up again since they have a lot of option to cover up their needs also for sure they will not experience any hunger for taking such good actions.

[bitLeap]

Over time, I've heard discussions about inflation and the rising cost of goods and services across almost every sector on the world economy.
However, suggestions have been made in various ways on how best to tackle the menace called Inflation. Recently I have personally thought that one of the ways to fight inflation in an economy is to increase minimum wage. More so there has been a back and forth argument on these, as some persons argue that the increase in minimum wage will rise the bar on commodities, because they feel hence you increase the purchasing powers, it will have a multiplier effect on the economy which might be challenging.

So guys, is increase in minimum wage not a good measure to fight inflation. Let's have your opinion.

It won't resolve completely and it won't last long either. Inflation cannot be fought or avoided because if the level of consumption of goods and services is now decreasing due to fulfilling people needs such as increasing public transportation, they are now complaining because the wheels of the economy are not turning for them because everyone already has their own transportation. then the level of shopping in offline stores is getting quieter, traders are also complaining about the same thing amidst demands to pay rent on time but the level of people purchasing power is massive in the online shopping sector. The unstable economic cycle and if you want to increase the minimum wage will still not have a significant impact if people's habits now start to change.

[Coyster]

An increase in minimum wage would not stop inflation in a particular country, but it would somewhat help workers to survive in a dire economic situation as they now have more money to spend. Increasing minimum wage during a serious economic crisis is similar to handing our palliatives to people, it would not help to stop inflation, but it brings temporary relief to the people.

Fighting inflation is not as easy as just increasing the nations minimum wage, there must be a change in economic policies and the country must work on production, rather than just consumption, local production and export of locally produced goods is one way to better an economy and fight inflation, and thus increase the purchasing power of the people.

[philipma1957]

Think of the top 1 percent. They must be drained of wealth to stop inflation.

Raise taxes on the top 1 percent punish them for excess wealth. They cause inflation as a weapon against the bottom 99 percent.

No more complicated than this.

Of course making the top 1 percent lose wealth no longer happens world wide so the bottom 99 percent suffer.

[Chilwell]

Over time, I've heard discussions about inflation and the rising cost of goods and services across almost every sector on the world economy.
However, suggestions have been made in various ways on how best to tackle the menace called Inflation. Recently I have personally thought that one of the ways to fight inflation in an economy is to increase minimum wage. More so there has been a back and forth argument on these, as some persons argue that the increase in minimum wage will rise the bar on commodities, because they feel hence you increase the purchasing powers, it will have a multiplier effect on the economy which might be challenging.

So guys, is increase in minimum wage not a good measure to fight inflation. Let's have your opinion.

I think when we talk about Inflation it covers everybody both government workers and other citizens, increasing minimum wage can never be the solution for inflation, because those that will benefit from minimum wage are only those that are involved in government sector and inflation affect the entire community. The economy of my country is very bad right now they have not talk about minimum wage and already price of things have started pushing up because of the inflation, we will have double high price if minimum wage is implemented and minimum wage only affect workers alone, the statistics of government workers are not up to 25% of the population of the country, so let assume 25% have been taken care of what about the Remaining 75% of the population and they are all involved in paying tax to the government so what do they gain due to high cost of commodities.

[philipma1957]

Over time, I've heard discussions about inflation and the rising cost of goods and services across almost every sector on the world economy.
However, suggestions have been made in various ways on how best to tackle the menace called Inflation. Recently I have personally thought that one of the ways to fight inflation in an economy is to increase minimum wage. More so there has been a back and forth argument on these, as some persons argue that the increase in minimum wage will rise the bar on commodities, because they feel hence you increase the purchasing powers, it will have a multiplier effect on the economy which might be challenging.

So guys, is increase in minimum wage not a good measure to fight inflation. Let's have your opinion.

I think when we talk about Inflation it covers everybody both government workers and other citizens, increasing minimum wage can never be the solution for inflation, because those that will benefit from minimum wage are only those that are involved in government sector and inflation affect the entire community. The economy of my country is very bad right now they have not talk about minimum wage and already price of things have started pushing up because of the inflation, we will have double high price if minimum wage is implemented and minimum wage only affect workers alone, the statistics of government workers are not up to 25% of the population of the country, so let assume 25% have been taken care of what about the Remaining 75% of the population and they are all involved in paying tax to the government so what do they gain due to high cost of commodities.

raising minimum wage raises prices and makes the top 1% get richer.

so anyone wanting to raise the minimum wage is an enemy of the lower class.

making a disincentive to become super rich is the best way to stop inflation.

but as I said it won’t happen as the super rich have the media locked down.

[HeRetiK]

Think of the top 1 percent. They must be drained of wealth to stop inflation.

Raise taxes on the top 1 percent punish them for excess wealth. They cause inflation as a weapon against the bottom 99 percent.

No more complicated than this.

Of course making the top 1 percent lose wealth no longer happens world wide so the bottom 99 percent suffer.

While I agree with the sentiment -- both regarding how wealth should be taxed after a certain limit and how inflation is at this point co-opted/weaponized to reallocate capital to the top -- I'm not quite sure how taxing the wealthy in itself would help fight inflation. By reducing government debt and thus indirectly reducing the money supply maybe, but we all know that's just as likely to happen as the top 1 percent giving up even part of their capital and power.

raising minimum wage raises prices and makes the top 1% get richer.

Prices get raised regardless of whether minimum wages get an increase or not. Sure, they would use it as an excuse for raising prices further, but they will do so regardless.

[franky1]

Prices get raised regardless of whether minimum wages get an increase or not. Sure, they would use it as an excuse for raising prices further, but they will do so regardless.

check any retail good. look at the manufacturer. look at the investors of product manufacturing.
and you see the same couple main investors
take pepsi, Kellogs:
vanguard
blackrock

take coca-cola, Kraft:
Berkshire Hathaway
blackrock

vanguard, blackrock, and BH want to make stock market profits, so companies selling food and drink need to make profits, so prices need to go up to keep investors happy

[Casalania]

Raising the minimum wage may provide some temporary relief to workers struggling to cope with rising prices of goods and services. However, this measure alone is not a comprehensive solution to the problem. It fails to address the root cause of the issue and is therefore not an effective strategy in fighting poverty.

it instead might increase inflation to be more rampant because the worth of money in the perspective of people also decreasing as mentioned by OP but yes it will give relief temporarily but overall its just delaying problem that needs to be focused, the solution would be best if the government could incentivize production on certain thing like food by giving tools and so on so that the price of food gonna decrease or anything out there that are becoming expensive due to inflation because the supply is high.
just basic economic that if the supply vastly surpass the demand it will automatically become cheap enough, by boosting production, certainly it will not make the people working in that sector suffer.
but well, i guess government knows best about what to do but sometime implementation is just hard.

Focusing only on specific areas like food can cause prices of other products and services to increase. This can lead to an imbalance in the economy. A better solution would be for the government to create a more comprehensive plan or to reduce their spending. They could also increase taxes to discourage excessive spending by individuals.

[Briankimp1]

Minimum wage increments is not and will never be a method of fighting inflation it’s a helpless plunge by the government to ease inflation, It only ends up causing more inflation there are methods that have proven effective like reduced importations and increased exports, reduction of salaries of high level government officials and also reducing expenditure this all depends on your nation’s population man power and technical knowledge,
With the right strategy and implementations inflation can be controlled and also extinguished.

[wxa7115]

Over time, I've heard discussions about inflation and the rising cost of goods and services across almost every sector on the world economy.
However, suggestions have been made in various ways on how best to tackle the menace called Inflation. Recently I have personally thought that one of the ways to fight inflation in an economy is to increase minimum wage. More so there has been a back and forth argument on these, as some persons argue that the increase in minimum wage will rise the bar on commodities, because they feel hence you increase the purchasing powers, it will have a multiplier effect on the economy which might be challenging.

So guys, is increase in minimum wage not a good measure to fight inflation. Let's have your opinion.

The minimum wage is not really a way to fight inflation and instead it is just a way to set a floor to the pay businesses can give to their employees.

If a government tried to use the minimum wage to fight inflation, businesses will react to this by lowering the hours each employee works for them or by firing several of their employees and ask the rest to do more for their new and higher salary, which will create unemployment and will aggravate the situation of all of those people.

[Poker Player]

More so there has been a back and forth argument on these, as some persons argue that the increase in minimum wage will rise the bar on commodities, because they feel hence you increase the purchasing powers, it will have a multiplier effect on the economy which might be challenging.

So guys, is increase in minimum wage not a good measure to fight inflation. Let's have your opinion.

If it is such a good system, how is it that Venezuela is the country in the world that has raised the minimum wage the most and is in ruins?

The only way it is useful to raise the minimum wage is if the country is productive, is rich, and can cushion the bad effect. What happens is the opposite of what you describe, which is what leftists usually defend: instead of stimulating the economy with this increase, what you do is to generate inflation, and in most cases based on debt, a debt that the state will have to repay with interest.

What happens after a year of raising the minimum wage? It has to be raised again because people in real terms are poorer than before the increase a year ago.

In other words, it is a shitty "solution".

[radjie]

Over time, I've heard discussions about inflation and the rising cost of goods and services across almost every sector on the world economy.
However, suggestions have been made in various ways on how best to tackle the menace called Inflation. Recently I have personally thought that one of the ways to fight inflation in an economy is to increase minimum wage. More so there has been a back and forth argument on these, as some persons argue that the increase in minimum wage will rise the bar on commodities, because they feel hence you increase the purchasing powers, it will have a multiplier effect on the economy which might be challenging.

So guys, is increase in minimum wage not a good measure to fight inflation. Let's have your opinion.

I think increasing employee salaries or wages is only useful for helping citizens fight the effects of inflation. And balancing employee needs so that they remain met even in inflationary conditions. Meanwhile, regarding inflation itself, actually increasing employee wages will have no impact at all if it is to overcome inflation itself. Because fighting inflation only has to be done by withdrawing excess money in circulation or increasing the level of productivity of goods needed so that they can still meet everything that consumers need. Because usually inflation is also triggered by the scarcity of a good or commodity. Such as the food crisis and the scarcity of petroleum. So increasing the minimum wage for employees only helps employees survive inflationary conditions but cannot overcome inflation itself.

Yes, to be more precise, increasing wages is able to mitigate the impact of inflation itself so that the economy can turn around at the social level.  As you said, the impact of inflation can occur due to the scarcity of a good or commodity. This cannot be said to fight inflation but rather help alleviate the impact that occurs.

[ndutndut]

So guys, is increase in minimum wage not a good measure to fight inflation. Let's have your opinion.

Increasing the minimum wage above inflation is the right thing to do when the country is not experiencing serious problems. In stark contrast to two years ago, many countries were experiencing serious problems due to the Covid virus problem. so that people are aware and understand that the economy is in decline and everyone is experiencing problems in the financial sector, including companies.

So it is unfair if the current minimum wage increase is above inflation. All governments are aware that this will be detrimental to companies so that in the end many will go bankrupt if there is an increase in the minimum wage or many companies will carry out massive layoffs because they cannot afford to pay employee salaries. Besides, when the minimum wage is increased, it doesn't have much of an effect because the prices of basic commodities also increase, you could say it's the same. So the conclusion is that increasing salaries during inflation is not a solution to fight inflation, but this is only to reduce pressure on employees who are affected by the increase in goods due to inflation.