Is increase in minimum wage a good method to fight inflation? - page 10.

Faisal2202

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Quote from: Spaceman1000$ on February 13, 2024, 06:41:40 AM

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

It is a good way to fight inflation, I don't know about at a bigger level like how much damage this could do at the country level but at the individual level, a person who was buying 1 Kilo Rice for $1 before inflation will find it difficult to buy the same rice for $5. But if the person gets an increment in the salary then he might find it less or not difficult to buy that same amount of rice for $5.

The point is, with inflation the purchasing power decreases but if you have more money then it is increasing, and isn't that obvious to us. I can't agree with the single factor that you have mentioned in your post about challenging, because this is not the only reason causing more increment in inflation, there are different past situations which has left a country in no condition or due to the corrupt leaders' inflation rate increases.

Scarlett_23

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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.

Casalania

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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.

Fortify

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Quote from: Spaceman1000$ on February 13, 2024, 06:41:40 AM

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 is often a vote winner and many governments will push it as far as possible, sometimes too far, because it's the companies that have to pick up the bill for this increase - not increasing government expenditures. However it should be done delicately because it can actually cause businesses to slow down or reduce their spending on employment, plus it makes those who have got a few notches above minimum wage disincentivized and demoralized. Then again greedy companies are all too often raising prices while using inflation as a measuring stick, so it makes sense to force them to raise wages at the same time, but pushing too hard can cause a backlash on investment in the country.

Franctoshi

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increase in minimum wage is just like a pain relief drugs, It's one of the measures to help caution the effect of inflation on the masses within a short period of time. We have money inflation and price inflation, Therefore to tackle both types of inflation you can reduce the inflation rate by reducing the money supply QT, through increasing the interest rates, which has been the method that the Fed applied when the inflation rate was way high, and secondly, reducing the cost of manufacturing and increases production ,thereby encouraging more locally manufactured goods and products, Therefore when the supply of products are on the increase, definitely will help reduce prices of goods ,these are possible ways inflation can be reduced to barest minimum.

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Quote from: Spaceman1000$ on February 13, 2024, 06:41:40 AM

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.

Check the countries with mostly high numbers of inflation, there importation is greater than their exportation and because they depend on foreign currency for importation, it gives it more demand than their own local currency and that weakened their economy, their purchasing power, and the currency

You don't increase a minimum wage when an economy is faced with inflation, there will be excess supy of money that will be chasing the less available commodities and thereby increased the price of commodities rapidly, the economy will only suffer more from inflation to hyper inflation.

When an economy is not stable and inflation is high, what the government need to tackle isn't increasing the minimum wage, they need to look for what exactly is causing the inflation to increase and make sure they fight it and bring it down. For example, 8 months ago, the United state was dealing with inflation of 9% increment, everyone was feeling the heat but today, it has been reduce drastically to 3%, China has an inflation of 2% currently and that's why things are good there and if they want to increase minimum wage, now is the right time but that most also be manage properly to avoid excess supply of currency.

kryptqnick

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I think this Investopedia summary pretty interesting:

Quote

Some economists argue that raising the minimum wage artificially creates imbalances in the labor market and leads to inflation. Other economists note that when minimum wages have been raised historically, inflation did not follow.

So it sounds like even economists, professionals in this question, have conflicting views. Perhaps there's no single answer.
Increasing minimum wage doesn't seem to help fight inflation, and I don't see how it could. What it can do is try to help the most vulnerable people suffer from the inflation less. But it's unclear whether such decisions have a negative impact either, because even though it seems that they should, in practice they might not.

Davian144

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Quote from: Spaceman1000$ on February 13, 2024, 06:41:40 AM

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 in all employment sectors will only save life difficulties for a while because this is only part of the initial assistance for all groups so that everyone does not feel frustrated by the arrival of inflation. Meanwhile, the way to overcome inflation itself is to reduce the price of goods so that there is an increase in people's purchasing power and can maintain the stability of the value of the country's currency so that inflation will not easily return at another time.

Because if inflation has occurred and with the decline in people's purchasing power and the absence of an increase in the minimum wage for workers, this will clearly make everyone feel more miserable because of this. Because it can be likened to someone who has fallen and even been hit by a ladder when their minimum wage is not increased by all companies or by all government agencies in their own country.

xSkylarx

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Quote from: Spaceman1000$ on February 13, 2024, 06:41:40 AM

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 will also increase the number of people spending or purchasing stuff, which also means the demand goes higher, and we know that the price also goes up. Though if we see it from our own perspective, it is really helpful but in the long run we can still feel that it has no effect as the price still goes up and our increase will be eaten again by the expensive stuff. The only way to fight inflation by ourselves is to cut spending and add income, that is the only way and let the government do its job.

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Quote from: Spaceman1000$ on February 13, 2024, 06:41:40 AM

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.

Personally I don't see this as a measure to curb inflation, within the economic context the effect of minimum wage on inflation is just little, the only importance of this measure is more circulation of cash but note when there is inflation though the government considers increasing worker salaries in other to align with the current economic situation but in real sense these measure does not force the price of goods down, the obtainable measure towards curbing inflation which is economic crisis is to prioritise production with the help of government and private sector alignment, also monetary policies should done adequately, the government should put to an end to the idea of borrowing to service debt, local and international debt should not be undermined, consider the fact that some firm or business might deem it necessary to reduce their workforce because of the increase in labour cost and again increase the price of their commodity so that they will not feel the impact of the new minimum wage, so how does this curb inflation.

el kaka22

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Not really, it just makes a lot more people live with minimum wage. It is a good thing to increase the minimum wage so that people are not poor, free market has some stops, regulations are a must, if it was 100% free, we would see 8 year olds working too, or people working all seven days, or people working 16 hour shifts, or people working for a penny.

There are some must have regulations and minimum wage is one of them, if there is no minimum wage, I bet you that companies would pay less than what we have as minimum wage right now and people would be in poverty. We should realize that we need to make it higher at times, to catch up with inflation, it is not a good thing for the economy but it is a must to protect the people.

Husires

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Increasing wages is a solution to inflation resulting from supply chain problems or energy and oil problems, but it is not a solution to any inflation. If there are problems in state administration, increasing wages means printing more money without monetary cover, and means increasing the supply of currency and without there being a gold and dollar reserve. inflation will inevitably increase and the problem will be greater.

Inflation requires knowing the cause of the problem first and then studying the best way to treat it. There is no fixed treatment for inflation.

bittraffic

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This is the kind of solution that will also make the businesses crumble to the ground. Businesses also will need to profit and if the government forces them to just increase the salary of their employees, they will lay off some people to lessen the people they will have to pay.

This will result in a more problem in society where the unemployment rate increases. There are many instances in my country that have this issue, especially in the rural areas where private companies are just removing the store attendant because they only need one who will act as cashier as well.

The businesses are also struggling, this is why some of them are trying to take it on their products, like the shrinkflation as a result of it.

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Quote from: Spaceman1000$ on February 13, 2024, 06:41:40 AM

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 will just only help for a giving time if nothing is done about the inflation because If even the minimum wage is increased and their is nothing done to stop steady rise of inflation you will noticed that no matter the increase of of minimum wage their is no value in money. The solution of to fight inflation is not by increasing the minimum wage, this is just temporary. The best way to fight against inflation is to do the necessary things that can cause instant deflation.

When their is inflation it will be even difficult to increase the minimum wage because this a time that the economy will be struggling, government borrowing money and owing workers. I think it will be difficult for government to increase the minimum wage. The best thing to do is to do everything that will improve the the economy and help deflation to take place.

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Quote from: Spaceman1000$ on February 13, 2024, 06:41:40 AM

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

Its a temporary band-aid on the festering wound of a broken money system and serves no tangible purpose.

Of course it is not a good solution, because you would have to keep doing the same increase in minimum wage again and again and again in perpetuity. Who is going to keep track of what the number for the minimum wage is now? Do we just increase once a year and every business has to keep up and update their employees salaries every time? Also, the very point of inflation is that money becomes worth less because of some triggering economic factor. And how are you going to stop the businesses from raising their prices every time they have to raise their employee wages? We live in a free market, after all...

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Quote from: Oshosondy on February 13, 2024, 06:48:11 AM

Increase in minimum wage can be used to ease the pressure of inflation that increase in price of goods and services have on government workers. If the minimum wage has been increased, this will help the government workers to be able to be able to have more money to pay for goods and services after there have been rise in the cost of goods and services. But this is not the way to fight inflation, it is just a way to reduce the effect of inflation on government workers.

The moment that minimum wage is increased then their will be a shoot in the price of commodity and that is one of the reasons the government is always considering while deliberating on the issue of minimum wage. And more inflation we set upon the people, and the economy will also be affected, and even with the so called financial expertise the economy is still suffering. We know the usefulness and we know how beneficial the increament will be in the lifes of the government workers, it will be better if the government can regulate the price of goods, it will be much better than increasing the minimum wage that is in my own opinion. Because even how financial advisors are falling.

franky1

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raising minimum wage raises costs of goods. so becomes a cycle of inflation of labour->goods->labour->goods->labour

the actual counter to cost of goods cost is finding cheaper methods of production. industrialisation, automation, imports.

for peoples income benefit. different NEW industries should open up. where minimum wage people can move into better pay/skilled labour to increase earnings. rather than asking for pay rises within the same company

for instance
grocery/fast food doing self service screens/ kiosks. whereby minimum wage earners then move on to do other roles elsewhere like landscaping on 2x income. thus the cost of groceries/fastfood doesnt need to increase due to minimum wage increase demands. and the populous find better jobs to get above minimum wage

if you are 25yo+ and on minimum wage of an unskilled role that requires no experience, you have not tried to better your circumstance. minimum wage unskilled should be for the younger crowd of workers that lack experience of the workforce. where minimum wage should be entry level for those lacking experience, skills

mu_enrico

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It depends on what you mean by "fight inflation." Is it about making it (the inflation) stop or slow down? Definitely not, since real inflation is affected by monetary inflation, i.e., an increase in the money in circulation. The new minimum wage policy won't increase money in circulation.

If it's about countering or balancing the effect of inflation, then yes to some extent, assuming the employment rate is exactly the same. Workers now get more money. However, if you calculate the real value of goods/services they purchase, it difference will be a rounding error since the price of goods and services also inflated compared to the previous year. The problem is, that wage isn't something that you want to be dictated by the government because it will affect the employment rate. For a company that is already on the edge of being unable to pay their employees, they may go bankrupt and make lots of people unemployed. The minimum wage is a bad policy if it's strictly implemented, only useful as a guideline.

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Quote from: Spaceman1000$ on February 13, 2024, 06:41:40 AM

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

An increase in minimum wage is just a temporal means of fighting inflation. If the government doesn't handle the root cause of the inflation and increase productivity the country will resort to printing more money which will lead to massive demand-pull inflation. The long-run effect of the increase in minimum wage is an increase in labor cost which might force businesses to lay off some workers. Businesses will also be forced to increase the price of goods and services due to high labour costs. Immediately my salary was increased, the landlord of my house also increased my house rent. For me increasing the minimum wage is not the best solution to inflation rather the government should seek means to earn more money through exports.

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Absolutely not, it doesn't help to fight inflation rather it increases the situation because the government will have to inject more money in circulation to pay wages which is not healthy for the economy.
The government needs to reduce the purchasing power as demands is higher than supply.
Besides all countries government knows how to tackle inflation from different levels using monetary policy, but the situation keeps growing.

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