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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 the

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

> 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.