What would be the possible result/s of every one getting a raise to keep online with inflation?

13 comments

1. If everyone got a 10% pay increase, then basically whatever the underlying inflation is add this amount to it. (roughly). Prices would also increase across the board, food, good etc, pushing inflation up more, and so it repeats.

2. This is how you get hyperinflation.

3. [deleted]

4. The price of goods isn’t just tied to people’s disposable income, though that is one factor. There’s also supply/demand, marketing perceptions, consumer confidence, employment rate, elasticity, consumer spending habits, availability of credit etc. So giving everyone a 10% raise across the board isn’t going to result in a 10% increase in the price of all goods. For example, if that raise immediately goes towards people’s energy bills, you’re not going to see the price of designer handbags go up by 10%.

5. For most things wages are only a small proportion of the cost, if wages go up 10% inflation goes up 1%.

6. As has been said, you would get hyperinflation. Meaning amongst other things that anyone not in a job, and therefore not getting the 10% rise, would be even more fucked than before.

7. More inflation

8. Remember that a lot of that 10% rise will come back in tax before anyone even has a chance to spend it.

9. That would lead to more inflation…

10. Look at places like Sydney and San Francisco as a good example, wages are high as everything else is

11. Yeah it would just push inflation and prices even higher

12. It would encourage more inflation, but not at a 1:1 ratio, there are many factors involved in price rises beyond just what people make.

13. Given that research has identified that profit margin increases are one of the main drivers for inflation in the USA, Australia and the UK, then the probable result would be further inflation caused by increases in the price of products (because they can), leading to another record year for share buy-backs and bonuses for senior executives who will have once again demonstrated their ability to “add value” to their companies.

    https://www.theguardian.com/commentisfree/2022/sep/25/inflation-price-controls-robert-reich

    https://www.theguardian.com/business/grogonomics/2022/sep/22/workers-did-not-cause-australias-inflation-woes-but-they-will-be-the-ones-to-sacrifice

    https://www.unitetheunion.org/media/4757/unite-investigates-corporate-profiteering-and-the-col-crisis.pdf