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Minimum wage doesn't grow with inflation because the point of inflation is to steal wealth from the working class: https://krugman.blogs.nytimes.com/2010/02/13

Minimum wage doesn't grow with inflation because the point of inflation is to steal wealth from the working class: https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/ https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

edanm 7y ago
That's not the point of inflation, and I don't think that article backs what you're saying up.
- dnautics 7y ago
  It absolutely does. Krugman comes out and says that it's a way to use policy to cut the wages of the working class. Read it carefully.
- clairity 7y ago
  inflation is used to keep the "time value of money" working so that capital is incentivized to be reinvested, lest it lose all its value over time. this impetus leads capital to relentlessly seek returns, which over time compresses returns to labor in favor of capital. so suppressing labor is certainly a consequence of our positive inflation policy. the intention can be debated, but note that various govermental units tolerated prejudiced efforts like mccarthyism and redlining too.
  - dnautics 7y ago
    I think the intent is to 'keep employment numbers up at any cost'. But that there is a (predictable, and evidenced) unintended consequence to the prescribed method of attaining that objective is an indictment of the class-blindness of the liberal economic polity, and, secondarily, the brokenness of modern 'science' and 'scientistic' pursuits. (not saying the right is much better on that front)
    - clairity 7y ago
      i'm sympathetic to the original indictment that capital holders (like many hbs grads) realized, and then moved to solidify, this tilting of the board in their favor by supporting inflationary policy. i'm not sure that the liberal economic polity is a distinct class from those same capital holders (but i generally disfavor left-right political framing anyways).
      - dnautics 7y ago
        Yeah sorry to make it seem too much like a left versus right issue, I hate both sides, I just specifically pointed out "left" because the left purports to care about the "little people" (see Krugman) while very much actively pursing policies that are great for capital holders and rhetorically espousing policies tantamount to throwing bones to everyone else.
scatters 7y ago
Inflation is a tax on wealth, not on labor.
- dragonwriter 7y ago
  It's a tax on wealth, but as the Krugman article points out it also allows real wage cuts without the psychological barrier facing nominal wage cuts, which facilitates corrections when wages have overshot their sustainable levels, assisting in reaching full employment (unsustainably high wages necessarily reduce employment levels.) This is related to why minimum wage is inferior to UBI as a basic support: minimum wage is in tension with employment, especially at the low end, in a fairly direct way. UBI, while it had to be supported somehow, isn't directly in tension with employment specifically at the bottom. I'd like to see minimum wage tied to inflation but UBI tied to a funding stream that grows with output, so that per capita benefits grow (over the long term) with per capita output. And I'd like to see minimum wage decreased from the level it is calculated at with inflation adjustments by the hourly wage equivalent of UBI (for simplicity, annual UBI/2000, so that a $12,000 annual UBI would reduce minimum wage by $6/hr from it's pre-UBI level.)
- kaibee 7y ago
  The prices of real things change in response to inflation. Inflation is only a tax on cash wealth.
  - dnautics 7y ago
    And which social class has relatively more of their wealth tied up in cash versus investments?
- bernawil 7y ago
  I don't get it. Asset prices track inflation like clockwork. What's even funnier to me is that taxes on wealth rarely raise as fast as asset prices! If anything it's a tax on income.
  - lonelappde 7y ago
lonelappde 7y ago
And the point of COLA is to give it back. You can't look at half a system in isolation.
- dnautics 7y ago
  You can't pretend a discontinuous system in continuous.

edanm 7y ago

That's not the point of inflation, and I don't think that article backs what you're saying up.

dnautics 7y ago
It absolutely does. Krugman comes out and says that it's a way to use policy to cut the wages of the working class. Read it carefully.
clairity 7y ago
inflation is used to keep the "time value of money" working so that capital is incentivized to be reinvested, lest it lose all its value over time. this impetus leads capital to relentlessly seek returns, which over time compresses returns to labor in favor of capital. so suppressing labor is certainly a consequence of our positive inflation policy. the intention can be debated, but note that various govermental units tolerated prejudiced efforts like mccarthyism and redlining too.
- dnautics 7y ago
  I think the intent is to 'keep employment numbers up at any cost'. But that there is a (predictable, and evidenced) unintended consequence to the prescribed method of attaining that objective is an indictment of the class-blindness of the liberal economic polity, and, secondarily, the brokenness of modern 'science' and 'scientistic' pursuits. (not saying the right is much better on that front)
  - clairity 7y ago
    i'm sympathetic to the original indictment that capital holders (like many hbs grads) realized, and then moved to solidify, this tilting of the board in their favor by supporting inflationary policy. i'm not sure that the liberal economic polity is a distinct class from those same capital holders (but i generally disfavor left-right political framing anyways).
    - dnautics 7y ago
      Yeah sorry to make it seem too much like a left versus right issue, I hate both sides, I just specifically pointed out "left" because the left purports to care about the "little people" (see Krugman) while very much actively pursing policies that are great for capital holders and rhetorically espousing policies tantamount to throwing bones to everyone else.

scatters 7y ago

Inflation is a tax on wealth, not on labor.

dragonwriter 7y ago
It's a tax on wealth, but as the Krugman article points out it also allows real wage cuts without the psychological barrier facing nominal wage cuts, which facilitates corrections when wages have overshot their sustainable levels, assisting in reaching full employment (unsustainably high wages necessarily reduce employment levels.) This is related to why minimum wage is inferior to UBI as a basic support: minimum wage is in tension with employment, especially at the low end, in a fairly direct way. UBI, while it had to be supported somehow, isn't directly in tension with employment specifically at the bottom. I'd like to see minimum wage tied to inflation but UBI tied to a funding stream that grows with output, so that per capita benefits grow (over the long term) with per capita output. And I'd like to see minimum wage decreased from the level it is calculated at with inflation adjustments by the hourly wage equivalent of UBI (for simplicity, annual UBI/2000, so that a $12,000 annual UBI would reduce minimum wage by $6/hr from it's pre-UBI level.)
kaibee 7y ago
The prices of real things change in response to inflation. Inflation is only a tax on cash wealth.
- dnautics 7y ago
  And which social class has relatively more of their wealth tied up in cash versus investments?
bernawil 7y ago
I don't get it. Asset prices track inflation like clockwork. What's even funnier to me is that taxes on wealth rarely raise as fast as asset prices! If anything it's a tax on income.
- lonelappde 7y ago

lonelappde 7y ago

And the point of COLA is to give it back. You can't look at half a system in isolation.

dnautics 7y ago
You can't pretend a discontinuous system in continuous.