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

[franky1]

if a company only says it offers minimum wage increases/promotion pay rises on par with inflation.. find out if you can ask for extra benefits. such as:
child care costs(pretax)
pension contributions
a business car
mileage(fuel expense)
a business debit card (meal expense)
any other things that are tax deductible

also asking for same pay. but hours off earlier in the afternoon if you can stay efficient to meet production quota/targets
(whereby you then dont need to pay for as much child care or have more time in evening to relax, or do side hustles)


before bitcoin made me independently wealthy to early retire. i worked, and as a hobby played with stocks and shares... and would have preferred to have tax deductible contributions to investment funds where employer matched it(pre-tax).. more so than post tax extra money in salary
if i had kids back then i would have prefered my employer(pre-tax) pay for child care vouchers or paid into a nursery/child care sceme
where by it was not an expense that needed to be paid from my post tax salary. thus freeing up more money post tax for me to spend on other needs. without it on paper showing as me getting extra income, thus benefitting both me and employer, as they can claim those expenses as deductibles on their end thus cut down on their tax burden thus keeps costs down, thus not have to raise prices of the goods they sold

asking for pre-tax benefits help.
for instance
if childcare is like $500 on your end. by having an employer subsidise/contribute. you then have $500 free and clear post tax you can spend elsewhere

if your employers pension scheme was say 5% match. where you contributed 10% and they contributed 5%. if they raised the match to say 7.5% you can then adjust yours down to 7.5% so same money went to pensions fund but you paid 2.5% less so then have a bit more post tax to spend elsewhere.. or you kept your 10% meaning 17.5% went into pension. so you got more higher pension later in life

[sekalitas]

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.

Increasing the minimum wage can be one strategy to address inflation, as it helps maintain purchasing power for some workers. However, individual citizens can also take steps to mitigate the impact of inflation by investing their money. Investing can potentially protect the value of your money over time, although it carries inherent risks.

[tbterryboy]

An increase in the minimum wage will ease the burden on the general population that is employed because they will have more money to spend hence they won't face issues from the rising prices, but what about those who are self-employed? Or merchants that are running their shops or businesses? They aren't going to get things for a lower rate by this method which means that will still not be able to earn enough money. Even if merchants do well by having enough profit margin, those who are self-employed or selling their services will still struggle.

So, there must be some solution that will solve the problems of every person in every sector or category and it shouldn't be an advantage for one group and others should still have to go through tough times.

[nngella]

If you are familiar with the production function of economics, which tells that income is highly related to labor productivity, technology, and capital stock.  The equation does not contain variables for inflation which means that inflation is not correlated with the income of an individual or household.

 On the other hand, inflation is highly related to money supply.  Money supply is the amount of money being circulated in the market.  The higher the money being circulated (which means that the central bank prints more money) then the higher the purchasing power of the people which pushes the prices to go high.

[DrBeer]

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 answer is simple - no it won't. The causes of inflation lie in another area. And by forcibly increasing wages, we will get nothing but... an increase in the cost of goods and services produced by those who will get a wage increase. Yes, it will affect the purchasing power of workers who have their wages raised, but it will also increase the cost of goods and services they produce for the rest of the population.... In short, simply raising wages will provide a temporary and limited solution that will not fix the problem

[Mauser]

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, I don't think that increasing the minimum wage is going to do any good for the inflation, because the business owners are not going to pay their higher employee salaries out of their own pockets. All additional costs for the business will be added on top of the product and handed over to the consumer. This is just going to make products more expensive and put more money into circulation. The employee itself has more money to pay for all the expensive products and there is no pressure to lower prices again. In my opinion it would be a better approach to make it easier for competitor companies to enter the market and put more pressure on monopol business. New competition is going to push the prices down again and lower inflation. Unfortunately I don't see politicians doing it and are more concerned with handing out gifts to secure their next election.

[Arenga pinnata]

fight inflation by stabilizing prices, not increasing employee salaries. because increasing employee salaries only increases people's purchasing power, not reducing inflation or lowering prices. The best way to fight inflation is market operations by meeting people's food needs so that prices are controlled so that inflation is controlled so that it does not rise high.

I agree with you because increasing employee salaries could even trigger an increase in production prices and could cause a company affected by inflation to go bankrupt more quickly because it has to pay employees more. And if government officials also increase the salaries of government officials, then this could also trigger the printing of more money and this will not overcome inflation but will increase inflation to a more severe level. Increasing employee salaries is only necessary to avoid a recession. but fighting inflation is not a solution.

[nngella]

fight inflation by stabilizing prices, not increasing employee salaries. because increasing employee salaries only increases people's purchasing power, not reducing inflation or lowering prices. The best way to fight inflation is market operations by meeting people's food needs so that prices are controlled so that inflation is controlled so that it does not rise high.

I agree with you because increasing employee salaries could even trigger an increase in production prices and could cause a company affected by inflation to go bankrupt more quickly because it has to pay employees more. And if government officials also increase the salaries of government officials, then this could also trigger the printing of more money and this will not overcome inflation but will increase inflation to a more severe level. Increasing employee salaries is only necessary to avoid a recession. but fighting inflation is not a solution.

Stabilization of the prices can only be achieved through monetary policy.  The central bank will sell their government bonds to the open market making the money in circulation lesser the the interest rates higher.  The higher the interest rates means that people will encourage to save and put their money in the bank.  This will result to lesser money in circulation and the lesser demand of goods which decrease or minimize inflation.  This is the reason why the government and central bank must not be governed by one entity only.  The Government will handle the fiscal policies (i.e. taxation) while the central bank will focus more on the monetary policies (i.e. money supplies, printing of money).

[Natsuu]

Increasing the minimum wage is a good start but to really tackle inflation, we might need more tricks up our sleeve. Like investing in education, making sure people have the skills for better jobs and throwing in some smart social programs. It's all about finding that sweet combo to make sure everyone gets a fair deal without causing other problems

[tygeade]

Increase in minimum wage cannot solve the problem of inflation. If the government wants to increase minimum wage currently it won't be up to 50% increase so what is now the point when the rise in inflation is approximately 80-90% every year. The funny part is that even when the government wants to increase the minimum wage, they don't do that every year it might be every 4 years if not a decade. There are other ways to decrease inflation in a country.

Relying on national resources and increasing manufacturing, exporting of natural resources in the country is one bold step that can help fight against inflation. Since the indigens of a country will not be relying too much on imported goods and services and start patronizing their own productions= firms. I feel this is the best approach. Also putting interest in all of these local production firms will also give way for more employment opportunities giving majority of the youth to have multiple jobs.

Depends on the nation, and depends on the average income. For example, in the USA people make around 58k a year right now, that may look great, but someone who works minimum wage could earn as little as 7.25 dollars. Not that many are left like that, because if you offer people that amount, you will not find anyone decent at all, you will left without employees.

But, let's assume that it's true, and you do get 7.25 per hour, that is the minimum wage right now. At 40 hours a week, you make 290 dollars, 52 weeks a year that would make it 15k. In a nation with 58k "average" income, median that is, 15k is poverty and nothing more. Of course people do not make that all too commonly, but if you increased that 100% higher, double the minimum wage, you would still be fine.

[tyz]

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

Logically, exactly the other effect should occur. If salaries are increased, this has a rather negative effect on inflation because many service and production jobs for basic and cheap goods are done by people with low wages. If personnel costs rise there, this has a direct impact on prices, which in turn causes inflation to rise.

[Renampun]

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.

carelessly increasing the minimum wage will only create new problems, the logic is simple, when the minimum wage is increased then entrepreneurs will reduce their workers, this is done to prevent excessive company spending, if entrepreneurs don't do that then they will only create a time bomb then It is not easy to increase the minimum wage, there are many considerations that must be studied more deeply.
To overcome inflation, the only one who can come up with a solution is the government, they must provide relief for entrepreneurs and also assistance for workers on minimal wages.

[Lorence.xD]

Increasing the minimum wage is a good start but to really tackle inflation, we might need more tricks up our sleeve. Like investing in education, making sure people have the skills for better jobs and throwing in some smart social programs. It's all about finding that sweet combo to make sure everyone gets a fair deal without causing other problems

To encounter inflation, an economy must increase the resources to match up with the demand.With this, a country should support agricultural industries of its own to generate more and to avoid scarcity of goods and services. There is just an increase with the prices especially with daily necessities, because of high demand and with low supply. Everything, especially with third world countries, are having soaring market prices. Increasing the wage will indeed help people to cope up with the phenomenon but will not entirely resolve it. It is a matter of finding the root cause; many countries prefer importation of goods than with exportation which is already enough to trigger skyrocketing of marketable needs. Almost all of the countries have industrial aspect, but not all governments of a country prioritizes prevention of such unwanted economic situation.

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.

carelessly increasing the minimum wage will only create new problems, the logic is simple, when the minimum wage is increased then entrepreneurs will reduce their workers, this is done to prevent excessive company spending, if entrepreneurs don't do that then they will only create a time bomb then It is not easy to increase the minimum wage, there are many considerations that must be studied more deeply.
To overcome inflation, the only one who can come up with a solution is the government, they must provide relief for entrepreneurs and also assistance for workers on minimal wages.

Entrepreneurs will just be a short term aid and owners are the ones which will benefit more. Monetary policy is the only way out of inflation however it will include industrial partnerships to control the ideal and mentioned policy in particularly with inflation. Days keep on getting tougher and rough. With capitalism, more people will indeed have job opportunities but prices of marketable goods will still remain.

[lixer]

To reduce inflation, the total wealth of the country must be increased. In that case, how many steps are needed, such as increasing the amount of remittances in any country, reducing inflation in that country. Also, the amount of defaulted loans should be reduced, currency of the country should be avoided from being smuggled abroad. The country needs to be manufacturing oriented and much more export oriented. Raising the minimum wage will never stop inflation. Raising the minimum wage may benefit some people but is not a permanent solution.

If only that's how easy things works, then great but unfortunately not. The most effective way to not default a loan is to not make a loan. It may be hard at first but there must be a way to make money in another way.

We should try and if ever we can't help but to make a loan, we must be sure that we can pay it on time because there are consequences about it, although if we keep thinking about it, it might motivate us to make enough money before our due dates. Raising the minimum wage is a dream of the workers. It may not totally curb the inflation but it helps the people to survive it better, yet it might also bring a negative impact on the company or the economy of a country.

[slashz9]

I think in the end it will be the same, when the minimum wage rises, people will compete to buy, in the end if an item becomes scarce and prices rise, I don't know the comparison but it won't be much different.
so this step is the same, it just takes a little longer.
inflation will continue to rise no matter what, unless fiat money is eliminated.

[topbitcoin]

In several regions and countries, there is currently economic inequality in society, where income is not commensurate with expenditure. In these years, energy and food prices have continued to soar, while people's incomes have remained the same, because there has been no increase in the minimum wage. And this will clearly cause the economic cycle to slow down, because in circumstances like this most people will choose to live frugally and also save, which in the end can cause people's purchasing power to decrease day by day. and we can see for ourselves how currently restaurants, entertainment venues and tourist attractions are starting to lack visitors, even small and medium businesses selling on the side of the road are also being affected because people rarely buy snacks.

To deal with inflation, increasing the minimum wage is one solution, but of course companies will think twice if they have to increase the wages of their workers, considering that the global market is not doing well and is full of uncertainty, meanwhile when a company increases the workers' wages, of course, this will only increase the burden on the company.

[shield132]

When there is inflation, an increase in the minimum wage is necessary to ease the pain of inflation on people. Btw the inflation rate that the government sets is not a good indicator because sometimes they say that inflation is 10% but actually in real life, product and service prices go up by more than 20%. Since many companies pay a minimum official wage to their employees, it's good if governments increase the minimum wage because an increase can help millions of people overcome financial difficulties. For example, while inflation is 20%, 10% increase in minimum wage can make it look like inflation is 10%.

[LastKiss]

When there is inflation, an increase in the minimum wage is necessary to ease the pain of inflation on people. Btw the inflation rate that the government sets is not a good indicator because sometimes they say that inflation is 10% but actually in real life, product and service prices go up by more than 20%. Since many companies pay a minimum official wage to their employees, it's good if governments increase the minimum wage because an increase can help millions of people overcome financial difficulties. For example, while inflation is 20%, 10% increase in minimum wage can make it look like inflation is 10%.

It's not strange when the government said the inflation is 10% but actually around 20%, that's because not all items are up more than 20% let's say in my place vegetables are up for 5% and rice up for 1% so the government will say that the inflation will be around 3%. Why we always feel that the inflation from the government is different from the reality because our daily needs are the one got big inflation.

Raising the minimum wage is good when the companies are able to raise their worker's minimum wage if they can't raise their minimum wage some workers will get fired from the company due to a lack of funds to pay the worker, in the end unemployment rate will increase and many people will lose their purchasing power.

[_BlackStar]

The minimum wage must be adjusted to inflation and in many countries demands for increases in the minimum wage often occur every year because workers feel they are not getting paid worth it with their work. I guess it's just a solution that the government and the company that employs you consider - but sometimes they are reluctant to raise it for various reasons.

It doesn't make sense to keep the minimum wage the same when inflation is rising - workers not only want to work to live, they also need financial well-being. In my opinion - increasing the minimum wage is a solution for employees, while the government can think of other solutions to reduce inflation.

[invo]

When there is inflation, an increase in the minimum wage is necessary to ease the pain of inflation on people. Btw the inflation rate that the government sets is not a good indicator because sometimes they say that inflation is 10% but actually in real life, product and service prices go up by more than 20%. Since many companies pay a minimum official wage to their employees, it's good if governments increase the minimum wage because an increase can help millions of people overcome financial difficulties. For example, while inflation is 20%, 10% increase in minimum wage can make it look like inflation is 10%.

It's not strange when the government said the inflation is 10% but actually around 20%, that's because not all items are up more than 20% let's say in my place vegetables are up for 5% and rice up for 1% so the government will say that the inflation will be around 3%. Why we always feel that the inflation from the government is different from the reality because our daily needs are the one got big inflation.

Raising the minimum wage is good when the companies are able to raise their worker's minimum wage if they can't raise their minimum wage some workers will get fired from the company due to a lack of funds to pay the worker, in the end unemployment rate will increase and many people will lose their purchasing power.

That's correct. In the long run, employers will lose their purchasing power due to inflation. If their salary is not adjusted to match the inflation rate, they will remain stagnant without any improvement unless they find an additional source of income, which may not be a viable option for many employees. However, during this scenario, they will have no other choice.