One of the major issues with inflation is that it puts the onus on wage earners to try to keep up. A depreciating unit of account benefits the status quo and puts the burden of negotiation on the one that wants to change it.
For example when Egypt cut their currency in half relative to the dollar over 18 months, every worker now has to try to double their wages or simply accept lower international purchasing power, and of course 99% get the latter.
One of the big narratives in UK and other parts of Europe lately is that they gotta prevent wages from rising too fast lest they cause inflation. But those wages are just trying to recoup some of their losses from inflation. First lawmakers said it was a supply chain problem, then they said it was an oil price problem, and now they say it's a wage problem, but ultimately it's a quantity of money problem (and an energy insecurity problem).
A lot of people change jobs unnecessarily just because that's how they get wage increases. Wages become "sticky" and so rather than moving up wages in place rationally to keep pace with inflation and the worker's own increased productivity, workers have to change jobs for no other reason than to reset the anchoring bias.
LynAlden / Lyn Alden
npub1a2…cw83a
2023-07-03 23:01:34
Author Public Key
npub1a2cww4kn9wqte4ry70vyfwqyqvpswksna27rtxd8vty6c74era8sdcw83aPublished at
2023-07-03 23:01:34Event JSON
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"content": "One of the major issues with inflation is that it puts the onus on wage earners to try to keep up. A depreciating unit of account benefits the status quo and puts the burden of negotiation on the one that wants to change it.\n\nFor example when Egypt cut their currency in half relative to the dollar over 18 months, every worker now has to try to double their wages or simply accept lower international purchasing power, and of course 99% get the latter.\n\nOne of the big narratives in UK and other parts of Europe lately is that they gotta prevent wages from rising too fast lest they cause inflation. But those wages are just trying to recoup some of their losses from inflation. First lawmakers said it was a supply chain problem, then they said it was an oil price problem, and now they say it's a wage problem, but ultimately it's a quantity of money problem (and an energy insecurity problem).\n\nA lot of people change jobs unnecessarily just because that's how they get wage increases. Wages become \"sticky\" and so rather than moving up wages in place rationally to keep pace with inflation and the worker's own increased productivity, workers have to change jobs for no other reason than to reset the anchoring bias.",
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