- Capitalism and Alternatives -

Could it be- wage rises don't cause inflation? Shock fucking horror!

In Reply to: British Economy. posted by Red Deathy on July 05, 1999 at 13:22:37:

: Noticeably, wages are rising faster than inflation, and yet, pace Nostradamus, the world has not come to an end. Could it be- wage rises don't cause inflation? Shock fucking horror!

I think not - Wage increases do cause one of two things. Either, inflation can kick up, or the trade deficit jumps. And I remember hearing that the deficit rose to the highest for several years. This basically means that the people who buy stuff are not paying their way. They are buying more stuff than they produce, and this is not sustainable.
I'm all for the workers being paid for what they produce, without large amounts of money going to managing directers (most of whom didn't start the company and so did not take the "risk" which the workers are forever paying the "fat cats" for), but they should be paid for what they produce. Any more and inflation kicks in or trade deficits start up. Both are economically damaging, and wage increases are OK if they are paid for with a rise in productivity.

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• Think so... Red Deathy Socialist Party UK July 19 1999 (0)