Topic: Is increase in minimum wage a good method to fight inflation? - page 7. (Read 1103 times)

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.

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.

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.

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...

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.

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

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.

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.        

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.

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.