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Makes me glad I live in a country where pay raise to match inflation (at a minimum) each year is mandatory by law. Allows us to ask for actual pay raises on to
by gdcbe 3y ago
Makes me glad I live in a country where pay raise to match inflation (at a minimum) each year is mandatory by law.
Allows us to ask for actual pay raises on top of that.
- jsdeveloper 3y agowhich country is that?
- cl0ckt0wer 3y agolooks like Belgium, Spain, France, Cyprus, Luxembourg, Malta and Slovenia https://www.ecb.europa.eu/pub/pdf/other/mb200805_focus05.en.pdf https://www.ecb.europa.eu/pub/pdf/other/mb200805_focus05.en....
- peter-m80 3y agoDefinitely, not Spain
- sib 3y agoThat seems like an effective way of creating self-reinforcing inflation.
- sn0wf1re 3y agoOnly if productivity stagnates, which it hasn't been in most industries.
- lesuorac 3y agoIf by self-reinforcing you mean run-away then the math doesn't work out. For nearly any Good / Service the price is not 100% labor. This means that if a price index (PI) goes up 2% and that causes a 2% increase in labor prices those labor prices will have a <2% increase in that PI. Lets be generous and say it has a 1% increase in that PI. That 1% increase will cause a 0.5% increase in the next PI iteration and next time it's a .25% and will effectively become 0% as the number of iterations increases. The fact that prices aren't 100% labor is also why when looking at minimum wage increases the cost of a good doesn't increase by the same amount that minimum wage does. i.e. increasing minimum wage 20% (historically) doesn't increase a PI by 20%.
- deleted 3y ago[deleted]
- thunky 3y ago> pay raise to match inflation (at a minimum) each year is mandatory by law So it's illegal to give someone a pay cut? I guess they lay them off instead, but probably that is a legal issue too? Luckily going out of business is perfectly ok (I assume), as well as never starting a business in the first place.
- deleted 3y ago[deleted]