True or False? Inflation devalues wages.

Discussion in 'Political Opinions & Beliefs' started by Ethereal, Jan 28, 2013.

?

Inflation Devalues Wages

  1. True

    98.4%
  2. False

    1.6%
  1. Iriemon

    Iriemon Well-Known Member Past Donor

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    Your conclusion relies upon an unfounded inference that wages are static. Inflation devalues money over time. Wages change over time. If wages increase more than inflation, wages have not been devalued.

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    If that were true, then the late 1970s early 1980s should have been the most profitable in history and a time of the greatest income disparity. Neither case was true.
     
  2. Brewskier

    Brewskier Well-Known Member

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    You've been so kind to remind us in the past about how wages only have increased for the 1%. I guess you're singing a different tune now that Obama got reelected. What a shock, I thought progressives were consistent?
     
  3. Iriemon

    Iriemon Well-Known Member Past Donor

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    If prices have increased 10% and wages increased 20%, how have wages been "devalued"?
     
  4. camp_steveo

    camp_steveo Well-Known Member

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    However, the value of the Dollar, or the purchasing power of the Dollar, is still lessened by the increased inflation.
     
  5. Iriemon

    Iriemon Well-Known Member Past Donor

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    Don't those higher prices also mean higher costs, including higher wages?

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    Why would you say that is because of inflation as opposed to other factors -- more automation, more outsourcing, weaker unions and labor laws, lower minimum wage, etc.
     
  6. akphidelt2007

    akphidelt2007 New Member Past Donor

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    But there are more dollars. If you can increase your wages higher than the rate of inflation, than you have actually increased your purchasing power.
     
  7. Iriemon

    Iriemon Well-Known Member Past Donor

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    While that is true in some periods (ie recessions) it is certainly not true overall over the past several decades, as wages have increased far more than inflation.

    How does it create a labor glut? If prices outpace wages, then labor is relatively cheaper, which would create greater demand for labor.
     
  8. beenthere

    beenthere Well-Known Member

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    Inflation is needed for a healthy economy, but not above 4%. Hyperinflation is going to kill us.
     
  9. Iriemon

    Iriemon Well-Known Member Past Donor

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    Why wouldn't inflation cause the price of labor to increase just like other prices?

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    Of course, those last three years are an anomaly because we had the worst recession in 80 years. It was the recession, not inflation, that cause the real value of wages to decrease.
     
  10. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Inflation has never been more stable in the history of the United States. Fear mongerers have been crying about hyperinflation for decades yet it never comes. Like I said, we have a bigger threat of deflation than high inflation, let alone hyperinflation.
     
  11. Iriemon

    Iriemon Well-Known Member Past Donor

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    It only devalues your wage if your wage doesn't increase to keep up with it. It does devalue that relative cost of paying your mortgage.
     
  12. beenthere

    beenthere Well-Known Member

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    unless your locked into a Union contract during the high inflation period. Believe me, you will never be able to make it up after the rampant inflation period is over
     
  13. camp_steveo

    camp_steveo Well-Known Member

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    Perhaps, but the value of a single Dollar has still decreased.
     
  14. Iriemon

    Iriemon Well-Known Member Past Donor

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    Correct. He is making a static analysis of a dynamic situation and, despite my best efforts to explain it to him, does not understand the concept of relative price parity.
     
  15. beenthere

    beenthere Well-Known Member

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    And have we hit the point that we have to start paying back the 6 Trillion dollars that was borrowed in the past 4 years alone??? Do you think you could look beyond the end of your nose for a few minutes???
     
  16. Iriemon

    Iriemon Well-Known Member Past Donor

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    He is exactly right. Your conclusion assumes that wages do not increase. If prices increase 10% and wages increase 20%, how have wages been "devalued"?

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    money =/= wages.

    Money is a medium of exchange.
    Wages are the amount paid (usually money) for labor.
     
  17. camp_steveo

    camp_steveo Well-Known Member

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    Was the value of the Dollar decreased?
     
  18. Iriemon

    Iriemon Well-Known Member Past Donor

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    B=/=C

    ......
     
  19. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Ummm... first off, most of the treasuries they issued were short term treasuries which we pay off constantly by just rolling over the debt which we will for eternity. In fact the US Treasury will have paid more than $6 trillion off in maturing treasuries this year alone. So first explain to me why this debt is any different than the debt we accumulated for WWII or when Ronald Reagan tripled the national debt in the 80s. For some reason, Uncle Sam has not knocked on my door yet to pay for WWII.

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    Who cares if you have more dollars?
     
  20. webrockk

    webrockk Well-Known Member Past Donor

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    On a macro level, if the wage earners' already meager discretionary spending is going towards increased grocery bills, gasoline and heating and cooling their homes, their money is not supporting theaters, restaurants, Apple stores, etc.....reducing the demand for employees, which creates a labor glut, and thusly... due to simple supply and demand...stagnates wages.
     
  21. Iriemon

    Iriemon Well-Known Member Past Donor

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    I never said such a thing. I've said that most of the growth of income in America for the past 30 years has gone to the richest and especially the top 1%. Plus, those are actual, not "real" or inflation adjusted wages. Inflation adjusted average wage growth has been much more modest.
     
  22. dujac

    dujac Well-Known Member

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  23. beenthere

    beenthere Well-Known Member

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  24. webrockk

    webrockk Well-Known Member Past Donor

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  25. beenthere

    beenthere Well-Known Member

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    Iri, I have NEVER found, " not "real" or inflation adjusted wages", in a Union contract yet and I have been a Union member for 45 years.
     

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