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This is an argument against inflation. The fact that an invisible hand can manipulate the value of wages further weakens labors bargaining power — a power whic
by etr-strike 9y ago
This is an argument against inflation. The fact that an invisible hand can manipulate the value of wages further weakens labors bargaining power — a power which has been nothing but eroded over the last 50years. Sorry, I feel employers should at least be honest and upfront with their employees when they’re cutting wages.
- marcosdumay 9y agoIt's not really acting upon bargaining power. If you look at almost every instance of nominal rigidity around, you will see it is caused by some kind of government intervention. On labor, it is mostly illegal or really hard to reduce salaries, even on deflation. That would force companies into firing people instead of just correcting their salaries. I am not convinced it is a good reason for inflation. It is the reason for inflation. It does exist. It does cause a lot of problems (as in bankrupting even rich countries) when inflation is gone. Yet I do think it is self inflicted in that a society can organize in a way that where it doesn't exist. I also have no idea it this way would be better or worse than our current ways.