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That sounds like blaming a broken money supply for lower wages. They are making the same wages. The inflation of money supply makes their dollar worth less.

That sounds like blaming a broken money supply for lower wages. They are making the same wages. The inflation of money supply makes their dollar worth less. Two separate issues. I would prefer to examine one issue on its own. The company has no say in the money supply. Their money is worth less as well. Do you expect a company to pay more when they are earning the same amount and employee production stays the same? The Fed is the only entity that controls money supply and the purchasing power of a dollar. Upset that what you are earning doesn't buy the same amount of stuff? Blame for that is entirely on us for asking the government for more while demanding lower taxes. Their only alternative to raising taxes is printing more money.

gjulianm 6y ago
The example is not about inflation, it's just a method to show how without any specific action, companies don't have incentives to raise wages. But in fact, it's a real example because it's what has been happening in the US for a while, inflation increasing, company profits increasing but profits stagnating. Anyways, the point is that companies will tend to push for lower wages, always. It's just how capitalism works, it pushes for maximizing profits. If there are more workers than jobs (which is the case almost everywhere) you can't say that competition will push companies to increase wages, because there will be no competition, and workers can't just stay home if there are no satisfying jobs.