3 ms·

Everybody earning more will just lead to more inflation. I expect most of the additional pay will end up in higher housing prices.

• Jasp3r 6y ago
  Increasing wages for everyone doesn't inherently mean everybody will earn more. Less money will go to shareholders, decreasing inequality
  • imtringued 6y ago
    It can be difficult for shareholders to earn money if there is high CPI inflation. If the previous year over year ROI is 7% and inflation grows by 3% then you have to increase your ROI to 10% just to catch up with inflation. This means only the most productive companies will actually maintain their existing growth. Compare that to a deflationary environment where every warm body with a big bank account can get 7% ROI without even trying or even do annoying things like employ workers.
• thomasahle 6y ago
  > Everybody earning more will just lead to more inflation. Normally we measure wage growth adjusted for inflation. In my case I referred to wages as share of gdp, which has been going down over the last decades. There is no reason that shouldn't at least be a fixed amount. If it's not, it means that people who make money outside of wages (shareholders etc.) are capturing a steadily larger part of the total economy.
• imtringued 6y ago
  This is the wrong mode of thinking. >I expect most of the additional pay will end up in higher housing prices. It will _justify_ existing house prices. If inflation picks up the interest rate will rise and the cost of housing will stop growing. The increased wages can still afford the same housing price, but not a cent more.