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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. Tal

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.
  - roenxi 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. If somebody doesn't have savings, then they are spending everything they earn. A 2% real change in wages would require them to reduce their real consumption by 2%. > Inflation mostly affects people that can save significant amounts of money for longer periods of time, not wage earners. It changes the situation from one where wage earners will maintain their lifestyle if nothing obviously changes to one where wage earners will be worse off if nothing changes. There is a practical difference between these two. If there was a choice, by far a majority of people would rather not live under that second regime. Similar (in a very minor way) to standing around on railway tracks; in theory there is no problem because when you see a train they could move - but still a normal person would not choose to stand there at all. Use of fiat and the associated inflation creates risk of costs for wage earners. A system wouldn't stably settle on that sort of outcome without government backing the token with some serious clout. The uniformity of fiat for labor is very suggestive that it isn't a social construct. Society isn't that uniform.
    - JetSpiegel 8y ago
      I agree that wage earners lose real purchasing power with inflation. However, agressive minimum wage adjustments and welfare (for lower incomes) and unions (for higher incomes) should provide all the incentives for employers to keep raising wages, I don't think banishing fiat money is necessary for that. There are other ways to achieve the same purpose. I also agree that it was preferable to be payed in non-deflationary tokens, but I fail to see any real-world examples of that.

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.
- roenxi 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. If somebody doesn't have savings, then they are spending everything they earn. A 2% real change in wages would require them to reduce their real consumption by 2%. > Inflation mostly affects people that can save significant amounts of money for longer periods of time, not wage earners. It changes the situation from one where wage earners will maintain their lifestyle if nothing obviously changes to one where wage earners will be worse off if nothing changes. There is a practical difference between these two. If there was a choice, by far a majority of people would rather not live under that second regime. Similar (in a very minor way) to standing around on railway tracks; in theory there is no problem because when you see a train they could move - but still a normal person would not choose to stand there at all. Use of fiat and the associated inflation creates risk of costs for wage earners. A system wouldn't stably settle on that sort of outcome without government backing the token with some serious clout. The uniformity of fiat for labor is very suggestive that it isn't a social construct. Society isn't that uniform.
  - JetSpiegel 8y ago
    I agree that wage earners lose real purchasing power with inflation. However, agressive minimum wage adjustments and welfare (for lower incomes) and unions (for higher incomes) should provide all the incentives for employers to keep raising wages, I don't think banishing fiat money is necessary for that. There are other ways to achieve the same purpose. I also agree that it was preferable to be payed in non-deflationary tokens, but I fail to see any real-world examples of that.