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0 pointskgwgk8y ago0 comments

The salaries do go up as well.

0 comments

No, they don't. That's by design.

https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

It's right there in plain English: Inflation exists as a policy to screw "workers" out of the value of their wages.

Workers is a nicer way to say lower classes. It doesn't include investors, financial sector, etc, who strongly benefit from inflation.

kgwgkOP8y ago

What he says is that high inflation makes posible for real wages to adjust (without cutting nominal wages) when such an adjustment is required. The price of labor fluctuates as the price of everything else, including capital, and when there is unemployment (lower demand of labor) wages would need to go down but they are “sticky”. These are cyclical adjustments.

dnautics8y ago

And that mechanism doesn't work, unless their salaries don't keep up with inflation. Notably, this relationship is asymmetric, since there is no corresponding way to increase labor wages without giving a pay raise.

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dv_dt8y ago

Wage data seems to say that it's growth does not match the amount that corporate valuations nor their profits. Nor does it match the growth of costs for longer term societal needs such as healthcare nor education... On the other hand large accumulations of wealth have had no such growth problems - let alone vs inflation.

So yes salaries go up, but not in concert with people's costs nor with the value that is generated by people's labor.

kgwgkOP8y ago

The question was if inflation can be considered a tax on wealthy and unwealthy alike, not how do real wages evolve compared to corporate valuations or whatever. In reality inflation is not even a tax on wealth, at most it is a tax on cash and financial assets (loans, bonds, etc.) and for the latter only inasmuch as the inflation exceeds the expectations.

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dnautics8y ago

No, they don't. That's by design.

https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

It's right there in plain English: Inflation exists as a policy to screw "workers" out of the value of their wages.

Workers is a nicer way to say lower classes. It doesn't include investors, financial sector, etc, who strongly benefit from inflation.

kgwgkOP8y ago

dnautics8y ago

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dv_dt8y ago

So yes salaries go up, but not in concert with people's costs nor with the value that is generated by people's labor.

kgwgkOP8y ago

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