Topic: Is increase in minimum wage a good method to fight inflation? (Read 1103 times)

Increasing minimum wage as it regards to inflation is good but should be taken only as a palliative measure to cushion the effects of inflation but the real thing to do should be looking at economic stabilization such as strengthening of your currency against the dollar and encouraging local production of goods and services in doing so foreign import rate will reduce and it will have it impact on the overall economic growth and stability

I have already posted here - raise of minimum wage wont do anything, as employer will have to pay a higher social tax. Each worker will become more expensive for the company. It isnt necessary to be a genius to figure out that those extra expenses will be added to product and service price. Which is - inflation again. That is as if people would fight fire by burning everything around. Increase of minimum wage is no better than printing new money. It is called "we have a problem, but let others solve it".

Talking about greater pay to tackle inflation misses the point. A superficial repair. No doubt, any stimulus helps struggling people right now. But long-term? Not enough. Think deeper: the government demands higher wages. But that cost is passed on. Companies boost prices to survive. Inflation is complex and ever-changing. The paycheck grows, yet what you buy stays the same or worse

This wage-inflation back-and-forth? That spiral is fragile. Businesses can only charge so much before customers leave. Employees may only expect so much before firms lay off. The system breaks down, not just numbers. Not blaming anyone. A holistic view is needed. We must first discuss why prices keep growing and salaries aren't keeping up, then find solutions to make the economy work for everyone

What might also happened in that case is the company will force to layoff their workers to compensate those request. That's why people should not be so aggressive for getting their demands since there are companies that can't able to give an immediate raise especially if they are surviving in harsh economic state on their country.

That's why people nowadays should find alternative solution on their droughts and create some opportunities on their free time since there are lot of things that they can do especially that everything is digitalized and they can work or either sell some products online to get an extra funds for them to sustain their daily needs or get some extra funds for emergency purposes.

If you're the type of guy that's stagnant and relies solely your living to your salary, it does help. But for how long with that increase you'll have to wait again until you get another one? The inflation isn't going to stop anytime soon and before it's like every year we get to see inflation rate increases but this time is crazier, we get to see reports of it monthly and they're increasing like 1% monthly.
That's actually a lot if it's going to be merged and added for the entire year so, with your possible 5%-10% of increase as that depends on the capacity of the company and the inflation goes up depending as well on your economy's performance but let's make it into the crazy situation before but now becomes a norm like a 12% inflation rate where we get that from 1% monthly increase.
It's enough? to say, yes but it's not going to be enough for the upcoming years to come as your salary increase above minimum will be lesser in terms of your purchase power with the goods that are also increasing. Plus all of the expenses, rent/mortgage or any obligation that you're paying monthly. Many of those are going to be expensive as well as there's a domino effect that we get to see when inflation rate increases. Coming from oil, commodities, food, etc. Everything now becomes so expensive that even the food prices will also affect the other things that we consume and use.

You are actually right as your response is like hitting the nail by the head. Whenever there is inflation, workers usually demand increase in minimum wage as if that will solve the problem. What this do in reality is that it makes the economic woes the new normal. By this I mean, the increase in price will become accepted and the increased pay will not be able to compensate for it as price will continue to increase across board living the unemployed and under employed to bear the brunt. The only known solution to inflation is fixing the economy and eliminating the imbalance that lead to it, every other action taken apart from this will just be temporarily cautionary.

Raising the minimum wage can help to tame inflation but it cannot be used alone and unless many more measures are used at the same time it is likely to have the effect of making it worse. The biggest thing that is likely to get inflation under control is raising the central bank interest rate, as this forces borrowers to rein in their spending and rewards savers in an economy. This stops the cycle of cheap credit which can fuel big bubbles over time and sends it into reverse. However economies can also be effected by outside influence that they have less control over - like wars started by other countries (Russia for example) or even things like a worldwide pandemic which can screw up supply chains which take years to straighten out again.

But having that raise would really be something that will really be a notable action if it would really be done by the government on which having that increase is something that somewhat could be able to fight off that inflation or something that would really be that beneficial for most people who are really that getting their monthly salary. Yes, we are living in a world on which economic problems such as this where these kind of raise would really be a saving grace for them but of course its not something that government could really be always something to do on which there would really be those conditions that raise up on their wages is something that could be that easily happen and thats why on the time that inflation is really that creeping out then majority of these workers or wage earners would really be having that overdropped kind of living on the time that their salary isnt already enough for them to spend on. This is a solid condition that describes in our country today that all commodities and primary need prices do keeps on increasing but not the salary that we do able to earn on which this is something that results into disaster.

Raising the minimum wage of workers is not a solution to inflation if nothing is done about inflation.  If the government raise the payment of workers and nothing is done about inflation,  marketers will take it as an advantage to increase of products in the market. It is better to make everything as possible to reduce the level of inflation because when workers minimum wage increases because of inflation it will only benefit only people that are salary earners and those that depend on the little business it will really affect them which they may not even be capable to continue with their  business.

Inflation is a critical problem in a country,  and if their is nothing to be done about it will so much affect the economy that the government won't be able to pay the allowance of workers.

No not really because as the price of commodities rise due to inflation no matter how much money you earn its value would be close to nothing. I remember watching a video where in there is a country and the inflation is so bad that printed money literally have no purchasing power and some of them are weaved into handbags or rags.

So it’s not really the quantity we are looking for but rather the value instead.

Increasing the minimum wage will better the life of civil servants but the challenge is that the same time it will also affect the price in the market, and to me increasing minimum wage is not a good way to fight inflation, the better way to fight inflation is through policies to be able to control the price and in other for the government to be able to control the price is to also be part of the manufacturer, that way there will be competition in the market, that way they can regulate the price better, so minimum wage increase is not a remedy to me there other options affordability is the goal. And there are people in the government that can make this things happen but hell no they don’t care we all just hope for a better world.

I get your point, the whole idea of the increase in minimum wage is to help increase the purchasing powers of the citizens as against a rising cost of goods and services. Inflation is one economic issue that devalues the take home pay of most workers and it's something that must be addressed, for private company, there's a way they can go around it by modifying the salary scale of the workers on the lower level, in a bid to help them balance up a little, since they might not have the resource to upscale everybody's take home.

As one solution, maybe that is true because an increase in the minimum wage can provide convenience for the whole community, but it is much more important how the government can make the prices of necessities more stable. For the record, it is not easy to control goods in the market because there are those who play a role in seeking profit amidst the difficulties experienced by the general public. This is where the government's role is much more effective in controlling because they have accomplices to reach a wider reach.

Imagine that the minimum wage never increases and goods continue to increase in price and the next question is how can people meet their living needs amidst conditions like this? Decreased purchasing power will also have an impact on farmers, because the harvest results will result in the absence of value in the offer to buy agricultural products so that they are used to buy them at cheap prices by distributors.

there are many problem with it just like how economy works in an nutshell try to solve this one problem then other problem arise, as much as I agree with minimum wage increase, the price of goods will just also gonna increase alongside the increase of minimum wage, the additional money that the workers got just gonna get balanced out by the supply and demand, thats usually how it become in the long run.
but I guess government can have other solution to solve this problem but i'm not so sure this problem can be solved easily.

if government can intervene the prices of basic goods, subsidizing the low income household I think it will be more effective but with controlled approach, if not it will also have the same effect as raising minimum wage, the increase of inflation rate.
just like how housing crisis happened across the world where people with average salary could only dream of owning a property, this also need to be intervened by government and in a good way to keep the price low. thats just my 2 cents.

Increasing the minimum wage by its own won't do anything to increase the health of the economy of a country, I am sure of it because it is something we lived here in Venezuela for several years. We went through one of the most savage inflation periods in modern history and yet, all the president and the central bank could do was to increase the wages, which was useless, since the price for good and services also increased. It was one of the darkest times for this country.
A chocolate bar could cost like millions of our local currency and we had to remove about eleven zeroes off our banknotes because the prices of all things were getting ridiculous.

In my opinion, the best way to tackle inflation is to step up production of good an services, make the people of the rural zones to be able to yield as much food as possible, so the prices will find a good balance. Only when the production is high enough, then one should think about increasing the minimum wage, in order to stimulate consumption by the average worker, otherwise inflation will continue to grow and get going.
There is a good reason by the countries of the first world are also called developed countries or industrialized countries, it is because the rate of production of vital good and services in those places is high, so inflation can be easily controlled through mechanism like adjustment to interest rates, instead opting to print more money.

  I think i support your motion, even in my own country it happened like that, mine is even worse because citizens were suffering of this inflation of a thing and government did nothing about it. The only thing government could just say is fake promises. Almost a year now,   even minimum wage have not been announced, they are still deliberating on it.  Despite the fact that minimum wage is not the way out, because is just small population of the citizens that are civil servants. So if their wages are increased, it would only cause more damage to the rest of the people because the demand will be high which make the price to be high as well.


Government increasing minimum wage because of inflation, is like he's only playing with the sense of the citizens. because it solves no problem, it makes it worse.
         what about those that are not civil servants? What provisions does the government has for them?
And also even if this minimum wage is been done, some time, not all the level of the government complies like state and local government don't want to comply with the federal government when it comes to the issues like increments in the wages of the civil servants. Which makes it not to be balance even between the civil servants themselves.

Well as for me, I think increase in minimum wage cannot fight inflation in any way. As we all know: Inflation is simply the continual increase in price of goods and commodities in the market.If there is increase in money supply without checkmating other factors like: High cost of production_ High cost of transportation of goods_ Increase in exportation than importation _High tax Levi on production and importation_ Higher demand and shortage in supply non governmental regulatory agencies to checkmate the prices that things are sold in the market and those deliberately hiding the products and goods that are meant to be displayed in sufficient quantities in the market for consumers e.g. The petrolatum products as the case may be.

an increase in the minimum wage for workers will actually not solve or reduce the level of the inflation problem. In fact, people's purchasing power will become weaker and the purchasing power of money will become less, thus the economy will weaken even if the minimum wage is increased to increase people's purchasing power but it will be difficult to recover. return.

In my view, raising the minimum wage to fight inflation has pros and cons. On one hand, it can improve the standard of living for low-income individuals and contribute to economic growth by increasing purchasing power. On the other hand, it may lead to higher costs for businesses, which in turn can result in price increases for goods and services, ultimately exacerbating inflationary pressures. It is important to consider all aspects of this issue and make decisions based on a comprehensive analysis of the economic situation.

It is not easy to do this and it is not the only solution, the government must also regulate the prices of goods so that they are affordable because if the focus is only on increasing employee wages then there will be many things sacrificed.
Increasing employee wages might be an effort to fight inflation, but it must be realized that not all countries can do this.

Regarding job loss or the lack of job opportunities limited by the company, it is already included in management in minimizing expenses by the company itself.
I don't think it has any influence on the policies created to fight inflation.