Topic: How can strikes affect short-term inflation? (Read 249 times)

Strikes aren't really factored into any meaningful inflation calculator. You can look at any inflation chart and look at the individual sectors that cause price increases, a strike isn't going to do anything. Inflation is too little supplies and/or too much cash in the economy, for a strike to result in too little supplies you need the energy sector, housing/construction sector, and entire manufacturing industry to collectively go on strike at the same time. It isn't likely.

It is very important. Anyone who is not investing their money in cryptocurrency or at least making any kind of investment that would keep their money safe from inflation is taking big risks. When the government and the banks starts printing lots of Fiat money, it would start losing its value and those who have not started holding their assets in the right place would always be the ones that will be affected by the decision that the government decides to make.

As for answering the question that the OP has asked, I think that strikes that like this can contribute to near-inflation. When a strike is a lengthy one, it impacts negatively on the economy.

And the second reason you are giving is nothing more but banks creating money out of thin air, something that is not known by most people is that banks can also create money thanks to their fractional reserve banking policies and that in fact a great deal of the inflation is not created by governments but instead is created by banks giving too many loans, so we are coming to a point in which the banking industry is not only not protecting the economy but putting it at risk, which is yet another reason to invest in bitcoin and become your own bank.

Inflation is caused by two things - government printing money or banks giving unbacked loans. That's it, everything else doesn't matter much, certainly not the strikes. Inflation means that the money becomes less valuable as the result of increased supply, so even if the whole country went on strike, it wouldn't shift the value of money much.

Not going to happen, business owners are in it by themselves and no one else and they will do everything they can to get their way, and workers are the same, this is why I have never understood the brand loyalty many people have towards their preferred products, I am the kind of person that is always looking for the best that I can get with my budget and if that means that I need to change the brand of products I am using I will do so without even thinking about it.

I wouldn't be so sure about that. Inflation right now is mainly related to disrupted supply chains and the huge economic recovery after the Corona collapse last year. In 2022 or 2023, that could return to normal, and with it inflation.
In addition, the FED has announced that it will raise interest rates up to four times in 2022. This should also limit inflation.

Exactly when the demand of essential goods are remain unchanged but shorten the supply is lead to short term or temporary inflation.

Right to strike should not be limited only to industrial dispute but also economic, social and political dispute too. People are striking for different reasons like  high wages, against corruption,inflation, racism etc.All strikes had their own motive.It's essential for securing all human rights, it provides an essential voice for minority group and it exposes the flows in governance etc.
But here the temporary inflation mostly affected by poor people so we should consider their livelihood too. Because everyone have right to strike "peacefully". When a protest or strike turns violent or obstruct public movement it defeat the very purpose of the protest.

I am not sure about the inflation part, but with the unemployment as it is and how the companies have enough money to just wait it out and then we could say that I do not think that it could succeed. So, they are doing this, and making a problem with the shortage of the items and services and that results with something that is quite entertaining.

Even if they manage to prolong it and make it a sustainable and permanent thing, then they will get what they want with probably a lot more put top on it. Remember wealthy people do not just "give" things, they end up trying to save 2 million dollars when they have 2 billion dollar revenue, that is how they get rich.

Everybody hates Socialism till the capitalist refuses to share the profits and riches. I think the picture in OP was about the strike by John Deere workers who had their bonuses slashed while the company's profits grew by double digits.

This is simply out of the supply-demand balance of labour. Automation has ensured that factories need way less human labours than they used to. The trend will continue and there won't be enough work for everyone. Lower wages can result in depression and the economic moguls don't want that. So its a matter of balancing for them.

How is that related to inflation though beats me. Workers having the right to strike only gives an outlet for demands and if handled properly, it can be a good thing. It has to be part of a healthy industrial society.

Remember recent queues to petrol stations in UK? Even though there appeared due to lack of truck drivers (due to covid UK boarders were temporary closed for foreign employees and contracts with current were not extended). Remember the chaos in mass media it caused, how fuel prices rose and people were limited with the amount they can bought. Consider this situation same as strikes. Strikes would increase inflation impact imo.

I think he/she has some points. What's actually possible is how Strike action of Union members can encourage inflation, even though they can also be used for good. They could decide to strike on a massive scale and that could easily create scarcity and cause inflation.
I tend to think that such Unions are sometimes anti competition but competition could be necessary to force price down. I won't be surprised if there are dictatorial Unions that impose price limits on businesses... for example, they could ask competitive bakeries not sell  breads at lower price anymore so other members with higher priced breads can sell.. . Then businesses will be scared to reduce price of their goods or services for fear of being attacked or penalized.

History likes to repeat itself, doesn't it? We should expect a crisis soon, if it already hasn't happened. Look not only at how many people lost their jobs, but don't want to work thanks to these social programs and benefits for those not working. It's hard to believe how much has changed in less than a year and nothing seems to change for the better. China will keep outsmarting the rest of the world since we're so dependent on them, and our wonderful goverment will not take care of our economy in any good way.

People will keep losing their jobs, inflation will grow and prices will keep going up. These strikes will make these events previously mentioned happen faster.

Strikes have nothing to do with short term or long term inflation.
Inflation is a process of national and global scale.Strikes can only affect the economy of a region or a city.They are strictly local and they cannot affect the national or global economy.
Even national strikes cannot have big impact over the national economy,because they are too short term.
If a strike somehow helps for creating inflation in the economy of a city or a region,then more products coming from other cities and regions will be imported to that cirty/region,causing the prices to go down.
OP,I feel that your post is more emotional rather than logical.Are the workers in West Virginia really treated as slaves?Public service employees don't have any right to strike in most countries in the world.Sad but true. 

If those workers strike work does not do their work as usual, it can cause the company not to produce as well, affecting the distribution in the country. The more strikes work in other companies because the company does not fill the work rights, that can make the country have inflation. That will not take too long to see the company will collapse because of a lack of workers.

The workers need to work for the company. In contrast, the company needs to fill their obligation to the workers such as giving payment, holiday, giving rewards to the workers, increasing employee wages, etc. It is like symbiosis mutualism between the company and the workers because if one is not balanced, there will be a problem between them.

Does the title imply you're staking your name and reputation on inflation being short term? I have to disagree. Inflation will definitely be long term.

Strikes of today are considerably different from strikes of past eras for several different reasons. Which must be considered if this discussion was meant to be legit? Labor unions of today are extremely centralized and partisan. They're more like government sanctioned monopolies than institutions which represent the interests of the working class.

Workers today who strike are often battling their own labor unions, more than their employers. They lack the freedom to opt out of the jurisdiction of unions which can be industry mandatory. They can quit their job, but they can never quit the union. Which makes unions more a form of slavery than jobs atm.

I do not think there is a direct link between these two. Usually, countries that have more union activity, including strikes, tend to be considered as risky by the globalised investment decision making machine that the world has become. This simply means less employment opportunities and eventually less growth. Inflation is, at this moment, global and due to an offer shock, so local strikes would not have much effect.

Problems about the welfare of workers has been existing since forever. I even remember back then when I was about 6-7 years old. My Dad was working for a large company of cargo ships who go overseas. Their salaries were not up to the proper standards which led to majority of the workers going on a strike along with my dad. But instead of being given what is rightfully theirs, they were accused with a wide variety of made up offences and was sent to jail. My dad and other workers with higher position like him would've rotten or perhaps get killed off in jail if my mother along with the wives of other imprisoned workers did not stay outside the jail's location day and night and asked for help from a well reputed politician. The best result though was only being released and handed a few change without the huge company paying for all the bsht they made the workers go through. They were even being followed secretly for years by paid individuals that may have been hired by the said company (maybe to make sure that the workers won't cause anither problem for them).This just shows how money and influence can bend the laws in favor of the privileged. Even the well reputed politician couldn't do much or just chose not to out of fear or was bribed (regardless though, I am thankful for his efforts).

Now as for the title, it will depend on what type of service a company provides and how big it is. The bigger it is, the bigger effects it will cause.

I'm confused, you said "nothing to do".
but followed by the statement “strikes can increase inflation”. Two different statements with one disclaimer which is "nothing to do". If nothing to do, then why do you think inflation is affected. Didn't production stop because workers went on strike?

Does that mean workers have a role in the ups and downs of inflation of an item they produce in a particular company, especially in the short term?
If YES, then there is a relationship, if NO, it means that even though the strike, the production of goods continues to increase. 

This has nothing to do with rights.

Strikes will reduce current supply while strike lasts. If it is a significant and coordinated strike prices may skyrocket for a short period (as the demand remains the same). This happened in Brazil in 2017.

So, strikes may increase inflation. But not for long time... prices will get back to normal when strikes ends.

Worker strikes, especially on sectors that produce essential goods and/or logistics side of things is definitely a big hit on the economy if ever. Essential goods with low on supply and high on demand would certainly increase its price without any further questions as to why it happened. Same case on other goods stuck due to the movement of goods being suspended due to the strike. It will be a huge problem short-term, unless and until the demands of the workers that started the strike are met.

If companies continue to be assholes to their workers. strikes will certainly occur every so often and the general public would be the ones who will suffer.

Theoretically, of course, we already know about what is meant by the purpose of this strike, because it is true that there is no element of workers in a production process, will result in the production process will not run well and smoothly and achieve its goals.
and when they strike in a job automatically the production they do will go on strike and eventually will make the time longer and not on target, this is one of the factors that is the main reason for the ban being carried out there.
moreover this is related to the education sector and teachers because if they go on strike it will automatically be affected by the students who are thirsty for education who will be harmed.
indirectly, strike is one of the problems that can disturbing the business world and influencing in a negative context
working relations, harmony in industrial relations and harmony social life of the community because it involves many related parties and
participate.

but on the other hand this should be protected because again loyal workers who strike must have a reason behind the strike and they should be protected as you said in your thread because if it is not like that then it means the work they do what is the difference with slavery which only has to submit to those who have authority and surrender to fate.

Well, I wish both parties consider the consumers first in the negotiations. That will likely prevent a strike action or deals that are unfavorable to the consumers. Lots of times both are more concerned about themselves and not those they are established to serve (the consumers).
I noticed how companies behave when pay increase (for example) is demanded by employees, they push the expenses to the consumers and the employees don't care too much as long as they have more money in their bank accounts. It should always be about others first for both the employers, employees, and even consumers.

I am actually in a neutral point where indeed when they made an amendment they actually had a clear purpose and purpose.
And when you look at what Virginia did in fact outline this statement outlawing all civil service strikes, the new law seems to only apply to public school employees.
this is based on the events of 2018 in which 20,000 teachers and other school personnel left their jobs due to a prolonged dispute over salaries and caused the world of education to be completely paralyzed and schools closed for some time.
Their reasons may be said to be reasonable because indeed when talking about a teacher who incidentally is a role model, it would be very unethical when talking about salary.
On the other hand, teachers are also normal human beings who really need money to survive because it is only from this salary that they can survive.
I think it's good for the government to make amendments in the hope that they don't want to make the world of education die completely due to the same case, but on the other hand, the rules they apply are against the norm and are difficult to accept.

I feel that the title doesn't match with the content. This discussion is more about the rights to strike/protest. IMO people have the rights to protest/strike but at the same time the company also has the rights to fire the worker and go bankrupt.

Anyway, regarding to the title, yes supply shock affects price inflation of affected goods/services in the short term. Let's say your company produces 100 BTC silver figurine (collectibles) per day, and your employees stop working for a week. If the demand is constant (ceteris paribus), the BTC silver figurine will be more expensive.

But the price of eggs will be the same.

If the strike becomes massive, like an entire country stops producing all kinds of goods and services, then you'll have a massive economic problem.

Strikes are generally *short term* therefore the company theoretically does not loose workers so they still have to work a way out to somehow keep their money flowing, so at the end, they usually increase the prices of their products which ends up causing inflation for the products which they produce and sell. But the whole probelm is the companies not paying their workers correctly or even having flawed laws.
((Data from internet, just in USA alone))
-To increase the efficiency of the workers one has to give them equal rights and protection as well.
- strikes will inevitably affect the prices but it won't be long lived.
-But the problem is not with the strikes but with the companies itself, causing chaos in the whole thing.
- so the only way to solve it would be actually going deeper and improving their laws, rules and regulations.

The condition of workers' welfare has become an issue that continues to this day.  Not only in Virginia, in various countries the bad rights continue to be suppressed by entrepreneurs on the grounds that they have been given salaries set by the government.  In fact, the wage is the minimum wage.  Entrepreneurs argue that if the labor costs are too expensive, they will go bankrupt and it will be difficult to make a profit.  That's why, whether it's a worker or not, really nothing has changed other than changing yourself and getting out of your comfort zone.

We all know that the strike movement carried out by factory workers is an act of their protected rights as one of the forms carried out between workers and the company. Conducted negotiations but reached a dead end and did not reach an agreement (in a simple sense, the Company refused to negotiate with trade unions or workers).

But the fact is that the West Virginia state strike law is neither allowed nor is it legal amendments for labor unions ¹.

Isn't this like working as an endless stunt. They are required to achieve the company's target as the fulfillment of production from various sectors. But on the other hand they do not have the right to submit a request as a form of agreement between two parties who agree to do what is asked by the company but the company must also fulfill what is their right as workers.

Not only employee workers, but the teacher's strike which is the main spearhead of education is even illegal there for them to go on strike ². according to the West Virginia legislator "public servants have no right to strike, they make a political statement by enshrining it in legislation and also ensuring that any future changes in legal thinking on this issue will not change the law in West Virginia". Sources say nearly 47% of workers had gone on strike until October³.

Conclusion:
Based on the case that occurred above, how can this be justice for workers who are only considered as slaves in the country they live in without individual rights that should be protected by law to establish good relations between the two elements (workers and companies) in order to carry out their duties. the goal is equal economic income.
As the title above: How can strike work affect short-term inflation?

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References:

• https://law.missouri.edu/arbitrationinfo/2021/04/18/west-virginia-legislature-codifies-illegality-of-public-employee-strikes/
• https://thehill.com/homenews/state-watch/540206-west-virginia-state-senate-passes-bill-that-bans-teachers-and-public
• https://www.washingtonpost.com/business/2021/10/31/faq-striketober/

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