Topic: Is increase in minimum wage a good method to fight inflation? - page 11. (Read 2003 times)

Government accept fiat as a legal tender, fiat is inflationary currency because the government can prints money, however the government will increase the minimum wage in order to fight inflation? the government create the problem and they also give the solution lol.

The increase in minimum wage can't fight inflation, if the increment surpassing inflation rate, the government can't get rich.

Inflation has a direct impact on the economy of the country and the surrounding community. Among them as obstructed the country's economic growth.
Based on the cause of inflation is the presence of demand inflation, this type of inflation occurs due to an imbalance between high demand and unbalanced supply in production. This results in an increase in the price of goods in accordance with the law of demand. And there is also inflation in production costs, this is due to an increase in production costs caused by an increase in input costs or factors of production. Finally there is a bottl neck inflation, which is caused by an unbalanced demand or supply factor.
And there is also the impact behind this inflation.
   1. Impact of inflation on exports
Decreased export capabilities of a country, inflation can make export costs higher, thereby reducing the competitiveness of export goods that cause income from the country's exports can decrease.
   2. Impact of inflation on the interest in saving.
The interest of people to save tends to decrease, this is caused by interest income that is lower than savings while savers still have to pay administrative fees for the tubes.
   3. Impact of inflation on the calculation of the cost of goods.
This makes it difficult for the basic price because it can cause the cost of goods to be too low or too high so that the level of inflation in the future is often difficult to predict accurately.
   4. Impact of inflation on income.
This is a positive and negative impact on individuals, because in some situations such as minor inflation that might encourage business actors to expand production which in turn can increase economic activity.
There may be a way to avoid inflation with bitcoin and crypto assets. Because basically it becomes one of the approaches considered by some people. That is because Bitcoin and crypto assets are often considered as a hedge for inflation because of the specific properties they have. Some investors are considered crypto assets as an alternative to store values such as gold. Besides IT, there are also investors who use bitcoin and crypto assets as part of a wider investment photofolio to reduce risk. Diversification allows them to protect themselves from large value fluctations. Then you can also use a decentralized financial platform or staking to get yields by storing supporting crypto. This can be a way to get a passive income that can fight inflation.
So the conclusion, there are several causes of inflation are increased demand, increasing money in circulation, increased production costs, mixed inflation, and as a result of community behavior. Meanwhile, the impact of inflation between it on income, calculation of basic prices and interest in saving. On the other hand how to overcome inflation can be done with several policies, namely monetary, physical and non monetary.

It will help the people fulfilling their needs, but it won't immediately solve the inflation. Increasing the minimum wage can even lead to higher inflation sometimes. When the labor cost increase the price for goods will increase too. With more money people will spend those on more goods and services, this will also lead in demand of those goods and service and most of the time with the demand increasing company will decide to increase the price for their goods and services this also lead to inflation.

Other than that Inflation is a really complex problem, it is not caused by single phenomenon and will not be solved by a single solution, many parties and politics will need to involve.

Would really be just that a temporal thing and not really that a solution if we do speak about increasing those minimum wage. We do know that there would really be several or tons of things that would be needing up to consider before it would really be considered. So its better not to make yourself that too mindful about those things because it would really be just that making you that hopeful on something that cant be happening.
This is why it would really be that best as an individual that you should be finding those extra jobs or works or having investment or having that business on which it would be able to patch up those things
on which you would really be able to make yourself that sustain even if inflation on every year gets worst. If you do have other source then you cant feel out those numbers since you do have the money
that you could really be able to spend out.

If you would really be just that contented on your current day job and year by year which goods and services cost becomes more worst then you would really be
finding yourself struggling on day to day living on which this is something that you should really at least sensible on the things that you've been dealing with.

Increasing minimum wage does not fight inflation but helps alleviates some of the symptoms that come with it.

More importantly it's unlikely to increase inflation alongside with it, given that (1) mininum wage workers need to pay for basic necessities like food and rent either way, so it's not like they'd have an effect on the demand side. What little overhead they would gain for "splurging" is likely to be negligible in the greater economy. And (2) companies will always charge as much as they can, regardless of how little or how much they pay their workers. After all they're not charities.

In the end no noticeable effect on inflation itself while alleviating some of its symptoms seem like a win to me.

With what I'm experiencing here in my country right now, increasing the salary isn't really a solution. Rather, I feel like it's just their action to somehow balancing the continuous increase of the prices of goods. For example, if prices continues to rise but the salary remains the same, people won't be able to buy more products. It'll force them to save money which means it'll decrease the economy's purchasing power. So in over for them to maintain the purchasing power and the economy, they increases the minimum wage so that those minimum wage earner can still afford to spend for their living expenses.

I'm not an expert with economy but it seems like since they cannot find a long term solution for inflation, they just increase the minimum wage to avoid worsening of the economy. It's like a short term aid that they provide.

Understand this mate, increment of minimum wage as a major factor like you called it doesn't give sustainable solution to the inflation problem it only gives workers a short frame relief. A purchasing power that can only be felt within the period the wage was increased but can't be sustained to the future doesn't seem like a major factor to me when inflation still persist.

  The points doesn't need to take the place of wage increment but if the right policies can only be put to proper functioning by the government in tackling the root cause of inflation then a minimum wage increment when implemented will be felt not just only in purchasing power but with value to the currency. AFAIK, purchasing power is not in the quantity of the currency but in the monetary value of the currency when pegged with other currencies in the international market.

Mean while the increase in minimum wage is one major factor use to increase the purchasing powers of citizen's, so should we not increase wages because of the prevailing inflations that is damaging the economy.
However I agree with some of your points in terms of corresponding resolution in terms of productivity and tackling the root cause of inflation, still it doesn't take the place of wage increase.

Labor costs will go up, which will force the employers to raise the prices of all goods and services.
The best way to fight inflation is to cut government costs and reduce the amount of money circulating in the economy.
Unfortunately, this method of fighting inflation might drive the economy towards a recession, leading to less demand for products and increased levels of unemployment. There's no "silver bullet" solution. Raising minimum wages and pensions is a populist solution, that is intended to protect the purchasing power of the poor people, but this might create a pro-inflation spiral in the economy.

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.

Increasing the minimum wage of workers doesn't solve the inflation problem it's just a surface amelioration but deep down it multiplies the inflation effect when the actual economic issues that leads to inflation hasn't be tackled yet.

Like you rightly said in the Op yes, there will be increase in prices of goods and services by marketers immediately it's announced that minimum wage of workers has been increased because they assume that that's the only way they too can benefit from the increase through a responsive increment in commodities. I think elevating the minimum wage without correspondent resolution to tackling the main economic causes of inflation only makes the country currency to further lose more value in the market.

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.