5 ms·

> You'd also get pressure from workers who don't want to be paid in tokens that lose 2.5% of their value each year. Who can say with a straight face that they w

> You'd also get pressure from workers who don't want to be paid in tokens that lose 2.5% of their value each year. Who can say with a straight face that they will accept a default 2.5% pay cut each year built in to their wages, no questions asked? That would verge on crazy. Getting no raises is a pay cut, yes. But most workers spend their wages in the same year, inflation is not a problem here.

roenxi 8y ago
Here is an analogy in real terms just to make sure we are on the same page: Contract A: I'll give you 1,000 warm meals in the first year, 980 warm meals in the second year and 960.4 in the third year, progressing according to meals = 1000 ^ (year - 1). There is an understanding that I'll maybe give you a raise every year or maybe not depending on market conditions. Contract B: I'll give you 1,000 warm meals a year. We'll renegotiate next year. If market conditions have changed I might offer you less. Now, in principle these two contracts are not that different and market conditions should force the employer to pay market wages. But if you offered a worker the choice between the two options they'd pick B. The structure of contract A is clearly not in the workers interest because it involves a lot of bureaucratic foolishness just to get offered a steady real income. It can only encourage shenanigans. If I were on Contract A (which, since I'm payed in fiat when I work, I am) then I have to semi-regularly run figures against a diverse array of facts to figure out if I'm making or losing against my starting salary and I have to fight my employer for a wage raise if inflation is 4% but they offer a 2% increase. In addition there is opaqueness about what inflation really is; the government agencies do their best to measure it but it isn't a perfectly distributed phenomenon. I don't think I can accurately estimate what wage increase would be maintaining a fair wage when I am working. I don't have enough information about, eg, inflation by postcode or asset class vs my consumption. I don't accept that that compensation structure is good for me as an employee. And more broadly the incentives for workers is to be paid in something that looks almost exactly like currency but does not inflate away year on year.
- JetSpiegel 8y ago
  Yes, the same nominal amount of dollars is worth less in the future, but the employer can also raise prices for the same amount without any loss in revenue. Talking about spherical cows here. Since inflation affects everything at once, it can be ignored when calculating wages vs profits. It's all about the distribution of money, not some esoteric "value" derived from macroeconomic variables. For wage-sensitive jobs, the minimum wage is usually raised every year (or couple of years), so that should correct for employees without leverage over their wages. Inflation affects different economic actors differently, but at "regular" levels of about 2% a year, it's too low to matter for the majority of people.
  - roenxi 8y ago
    > employer can also raise prices for Yeah, the employer is fine. This is about the people earning the wages. > Talking about spherical cows here. > Since inflation affects everything at once Are we dealing in spherical cows here or not? That is a friction-less spherical cow if ever I've seen one. The agreement on inflation is to use the best-guess, which is the government number, but the as-experienced effect of monetary creation would varies enormously depending on where and how people are engaging with the economy. > at "regular" levels of about 2% a year, it's too low to matter The ordinary people I've dealt with care a lot about small amounts of money because they don't have much to spare. 2% p.a. represents a significant risk to them. And, critically, if a wage earner had a choice they wouldn't choose to be subjected to it.
    - JetSpiegel 8y ago
      By too low to matter I mean the employee doesn't meaningfully change their situation. If they need to work for a living anyway, earning 2% more doesn't make them retire earlier. Inflation mostly affects people that can save significant amounts of money for longer periods of time, not wage earners. The alternative to getting payed in fiat is some other value storage thing that is even harder to turn into rent and groceries. Unless it's actual groceries and corporate housing, or token for corporate shops, which is even more regressive.
      - 8y ago

roenxi 8y ago

Here is an analogy in real terms just to make sure we are on the same page: Contract A: I'll give you 1,000 warm meals in the first year, 980 warm meals in the second year and 960.4 in the third year, progressing according to meals = 1000 ^ (year - 1). There is an understanding that I'll maybe give you a raise every year or maybe not depending on market conditions. Contract B: I'll give you 1,000 warm meals a year. We'll renegotiate next year. If market conditions have changed I might offer you less. Now, in principle these two contracts are not that different and market conditions should force the employer to pay market wages. But if you offered a worker the choice between the two options they'd pick B. The structure of contract A is clearly not in the workers interest because it involves a lot of bureaucratic foolishness just to get offered a steady real income. It can only encourage shenanigans. If I were on Contract A (which, since I'm payed in fiat when I work, I am) then I have to semi-regularly run figures against a diverse array of facts to figure out if I'm making or losing against my starting salary and I have to fight my employer for a wage raise if inflation is 4% but they offer a 2% increase. In addition there is opaqueness about what inflation really is; the government agencies do their best to measure it but it isn't a perfectly distributed phenomenon. I don't think I can accurately estimate what wage increase would be maintaining a fair wage when I am working. I don't have enough information about, eg, inflation by postcode or asset class vs my consumption. I don't accept that that compensation structure is good for me as an employee. And more broadly the incentives for workers is to be paid in something that looks almost exactly like currency but does not inflate away year on year.

JetSpiegel 8y ago
Yes, the same nominal amount of dollars is worth less in the future, but the employer can also raise prices for the same amount without any loss in revenue. Talking about spherical cows here. Since inflation affects everything at once, it can be ignored when calculating wages vs profits. It's all about the distribution of money, not some esoteric "value" derived from macroeconomic variables. For wage-sensitive jobs, the minimum wage is usually raised every year (or couple of years), so that should correct for employees without leverage over their wages. Inflation affects different economic actors differently, but at "regular" levels of about 2% a year, it's too low to matter for the majority of people.
- roenxi 8y ago
  > employer can also raise prices for Yeah, the employer is fine. This is about the people earning the wages. > Talking about spherical cows here. > Since inflation affects everything at once Are we dealing in spherical cows here or not? That is a friction-less spherical cow if ever I've seen one. The agreement on inflation is to use the best-guess, which is the government number, but the as-experienced effect of monetary creation would varies enormously depending on where and how people are engaging with the economy. > at "regular" levels of about 2% a year, it's too low to matter The ordinary people I've dealt with care a lot about small amounts of money because they don't have much to spare. 2% p.a. represents a significant risk to them. And, critically, if a wage earner had a choice they wouldn't choose to be subjected to it.
  - JetSpiegel 8y ago
    By too low to matter I mean the employee doesn't meaningfully change their situation. If they need to work for a living anyway, earning 2% more doesn't make them retire earlier. Inflation mostly affects people that can save significant amounts of money for longer periods of time, not wage earners. The alternative to getting payed in fiat is some other value storage thing that is even harder to turn into rent and groceries. Unless it's actual groceries and corporate housing, or token for corporate shops, which is even more regressive.
    - 8y ago