I keep trying to make this point, but some around here, while they would probably agree to limiting increases in the minimum wage, suddenly do a 180 when it comes to limiting increases in their own wages. My point has always been that trying to chase inflated prices by also inflating wages (at any income level) just leads to more price inflation, followed by more wage inflation, ad infinitum. It’s the “wage-price spiral.”
While the wild government spending and inflationary energy policies of the federal government have got to stop, we also have to resist the temptation to just start demanding higher wages to compensate for price increases. The only wage increases that are not inflationary are those that are in response to proportionally higher productivity. But just boosting wages because people want more pay makes everything worse.
It’s not much different than what happened with the housing bubble and subsequent collapse. The price bubble was caused by too much easy money being showered upon buyers who couldn’t otherwise afford those house prices (plus the selling of mortgage derivatives). Does anyone who is now calling for wage increases believe that applying similar logic back then by handing homebuyers even more money to keep up with increasing home prices would have been a good idea? It would have just added jet fuel to the price spiral and made the inevitable collapse even worse.
We have to stop the madness or it won’t be long before the average wage will be $200,000 and a loaf of bread will cost $100, while those on fixed incomes are left in the dust and starve to death. There’s no way out of that upward spiral except total collapse.
The fast-food restaurants will soon go full robot staffed. After the initial investment,the costs will be minimal and it will be some time before robots are “woke” enough to demand a raise.
Goodbye to entry-level jobs for teens.