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Can I ask why the increase in minimum wage isn't expected to cause inflation?

(8 Posts)
Katymac Mon 29-Feb-16 23:12:02

I just imagine everything will rise in price

Farmer has to pay more, so food costs more
Shop & distrubuters have to pay more so food costs more
Restaurants have to pay more so food costs more

& childcare
& services
& everything really

Isn't that what inflation is?

pastmyduedate0208 Mon 29-Feb-16 23:16:29

The idea is that the wage increases cause profits to decrease marginally, but supply-demand based pricing stays as it is.

Plus the Tory Gvt subsidises businesses in the way they always do through corporate welfare and tax relief.

It's a spin tactic anyway.

Katymac Mon 29-Feb-16 23:18:22

& small businesses go bust?

pastmyduedate0208 Mon 29-Feb-16 23:19:32

There's the more pressing issue of Brexit devaluing the pound which will cause high inflation, more so than a minimum wage increase, as we are so dependent on imports.

pastmyduedate0208 Mon 29-Feb-16 23:21:05

Yeah small businesses will struggle the most.
Our gvt like to support multinationals and Big Corpa.

TalkinPeace Tue 01-Mar-16 18:05:57

The Government is really really struggling to stop deflation at the moment
Commodity prices - food, fuel, raw materials - are all sliding

they desperately want to create a bit of inflation to allow debts to shrink and productivity to rise

Katymac Tue 01-Mar-16 21:32:18

So despite it being a 'living wage' it's unlikely anyone will be better off as everything will cost more?

lovelyupnorth Wed 02-Mar-16 10:04:10

We are having to raise our prices to cover it, as are most of our customers and suppliers so it'll end up the government paying less in tax credits but no one really much better off.

One of my friends business are reducing hours from the 1st of April

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