You can't help soften the blow of inflation by giving people more money! That will just cause more inflation and make everything worse!

We've all heard it a thousand times, giving normal working class people, especially poor people, more money will only make everything worse by causing more inflation. Somehow this will leave the majority worse off than if nothing had been done.

This is considered common sense among liberal-conservatives but as leftists we instinctively know that it is bullshit. Maybe higher wages and benefits would increase inflation but the net total is that the working class would be better off than before.

Instinct is not a very convincing argument though so how do you argue the case against the wage inflation spiral to liberal-conservatives?

    • Rixuyo [any]
      ·
      2 years ago

      This is my go to argument that is easy to understand for most people. Labour cost is not 100% of the total costs, so a $1 increase in salary will not result in a $1 price increase but at most, let's say, $0.50. This means that a salary increase will always improve purchasing power, as the salary relative to the product price changed in favour of the worker, despite any smaller product price increase.