ATTN: AC-ists (2 Viewers)

[TacoTerrorist]

^ That doesn't make sense, unless you somehow believe that the free market benefits society as a whole and not a few capitalists.

 

[SylviaB]

^ That doesn't make sense, unless you somehow believe that the free market benefits society as a whole and not a few capitalists.

when nations free up their economies collective standards of living always rise

 

[aussie-boy]

if you're so unskilled as to have a minimum wage job, then obviously your skills aren't exactly in short supply so its absurd to suggest you're entitled to some minimum amount of income

There are 11.05m employed people in Australia
Of these, 1.4m are on the minimum wage.

So were talking about 12.7% of workers, not just the "so unskilled" dregs of the labour market

 

[SylviaB]

can I have the source please

 

[aussie-boy]

can I have the source please

6202.0 - Labour Force, Australia, May 2010

Inflation could stymie future wage rises

 

[scuba_steve2121]

6202.0 - Labour Force, Australia, May 2010

Inflation could stymie future wage rises

your second article lost all its credibility when it inferred raising wages causes inflation lol

 

[aussie-boy]

your second article lost all its credibility when it inferred raising wages causes inflation lol

The only thing needed to be extracted from that article is the 1.4m number, which is highly unlikely to be just made up.
Read the thread before you post.

---
Anyway, how do rising wages not cause inflation? (obviously if they are directly matched with productivity growth they don't - but otherwise, pls explain...)

 

[funkshen]

Anyway, how do rising wages not cause inflation?

He thinks inflation is only a product of excessive money supply growth.

Although I doubt recent minimum wage increases will feed into any inflation expectation forecasts.

 

[Rothbard]

He thinks inflation is only a product of excessive money supply growth.

Inflation by its very nature is caused by a devaluation of the currency, this devaluation of the currency is measured in the overall reduction of its ability to buy basic goods and services, correct?

Ergo, any increase in the money supply would overall diminish the value of the currency?

 

[funkshen]

Inflation by its very nature is caused by a devaluation of the currency, this devaluation of the currency is measured in the overall reduction of its ability to buy basic goods and services, correct?

Ergo, any increase in the money supply would overall diminish the value of the currency?

No doubt. Devaluation of the currency occurs when prices rise - ergo, a given amount of currency will have less purchasing power. If theory is correct than money supply obviously plays an important role in price stability (given the belief that MV = Py). But the idea that that equation is the be all and end all of explaining inflation, currency devaluation and money growth effects is ridiculous. For the life of me I can't remember the wage-price spiral equation.. it's not just W increase --> P increase --> W increase but I dunno m8

 

[scuba_steve2121]

No doubt. Devaluation of the currency occurs when prices rise - ergo, a given amount of currency will have less purchasing power. If theory is correct than money supply obviously plays an important role in price stability (given the belief that MV = Py). But the idea that that equation is the be all and end all of explaining inflation, currency devaluation and money growth effects is ridiculous. For the life of me I can't remember the wage-price spiral equation.. it's not just W increase --> P increase --> W increase but I dunno m8

other way round

prices rise when Devaluation of the currency occurs

 

[scuba_steve2121]

The only thing needed to be extracted from that article is the 1.4m number, which is highly unlikely to be just made up.
Read the thread before you post.

---
Anyway, how do rising wages not cause inflation? (obviously if they are directly matched with productivity growth they don't - but otherwise, pls explain...)

how does the value of money going down result from an increase in wages?

 

[-Lemon-]

how does the value of money going down result from an increase in wages?

higher input costs (labor) ==> increase in prices

but what do you mean by 'value of the money'.......?

 

[aussie-boy]

how does the value of money going down result from an increase in wages?

because a greater proportion of company revenues go to low income earners with higher MPCs than their employers who would have kept the money in profits otherwise

so money passes through the economy at a faster rate, effectively decreasing its value

 

[Garygaz]

oh yay, a thread where we can copy our textbooks into a thread


/wat

 

[jennyfromdabloc]

because a greater proportion of company revenues go to low income earners with higher MPCs than their employers who would have kept the money in profits otherwise

so money passes through the economy at a faster rate, effectively decreasing its value

Hahaha yeah because high income earners just lock their piles of cash away in vaults.

Even based on your own basic, textbook, neoclassical economic theory, what you have said is completely wrong.

Savings = Investment.

Money that is saved is still spent on capital goods, and labor for investment, and so it is still being circulated in the economy, bidding up prices.

 

[aussie-boy]

Hahaha yeah because high income earners just lock their piles of cash away in vaults.

Even based on your own basic, textbook, neoclassical economic theory, what you have said is completely wrong.

Savings = Investment.

Money that is saved is still spent on capital goods, and labor for investment, and so it is still being circulated in the economy, bidding up prices.

Except that banks have reserve ratios which prohibits a certain % of that money from being lent out

And then secondly you have to consider that rich people will spend their money on luxury goods which dont affect the CPI nearly as much as minimum wage workers buying basic goods

 

[scuba_steve2121]

Except that banks have reserve ratios which prohibits a certain % of that money from being lent out

And then secondly you have to consider that rich people will spend their money on luxury goods which dont affect the CPI nearly as much as minimum wage workers buying basic goods

this has nothing to do with the value of money going down. you have no logical bases, you're just spurting out the different ways money circulates in an economy.

 

[scuba_steve2121]

higher input costs (labor) ==> increase in prices

but what do you mean by 'value of the money'.......?

i want to assume that you think inflation is prices rising.

however prices don't all rise at the same time due to higher input cost of one particular industry.

inflation is not prices rising that is merely an effect of inflation. inflation in itself is the value of money going down meaning that 10 years ago $4 could of bought you a massive lunch at your school canteen but now, not

 

[-Lemon-]

i want to assume that you think inflation is prices rising.

however prices don't all rise at the same time due to higher input cost of one particular industry.

inflation is not prices rising that is merely an effect of inflation. inflation in itself is the value of money going down meaning that 10 years ago $4 could of bought you a massive lunch at your school canteen but now, not

Huh?
Inflation is defined as a sustained rise in general price levels..
Yes it's caused by a number of things, but what do you mean by 'the value of the money'..are you talking about purchasing power?
Please be more specific young man.