To think inflation is used to Scare us?

[Tinkerblonde1]

Wondering other people's opinions, really.

Also how many of us just don't understand. I am no economics expert. I am not stupid. I have a Physics degree so not totally stupid, anyway, but I have tried to read about economics. It is really difficult.

I have read a lot about modern monetary theory. Ok it's a theory, which economics is! It's a man made concept. So all theory but I do feel the government oversell the fact the economy is like a household budget so we think there is no money.

They don't want to increase the minimum wage. They are worried about inflation. They don't want to increase wages for rail staff, barristers. Inflation!

We are a rich country with a solid infrastructure and a fairly well educated population. We are not Zimbawe.
AIBU to think inflation is a big excuse to keep us in our places? It doesn't need to be this way?

Does it?

Inflation is real and a very bad thing, unless you withdraw from using fiat money and start your own currency. Being rich and well educated has nothing to do with it. The Weimar Republic wasn’t poorly educated when it crumbled under the pressures of inflation and look where that got us.

For the monetary system to work and for society to function, we have to believe there is a finite supply of money. However, that is not an absolute fact. This notion is manipulated all the time by those who control money supply. Who have been printing tons of it since 2008 and then printed more of pay for the lockdowns than the previous 12 years. At the same time supply was suppressed. Locking up healthy people and paying them to do nothing did not work out well in the end.

This particular cycle of Inflation isn’t somehow suppressing wages. That happened a long time ago. The welfare culture and subsidizing of low wages saw to that. Raising wages now would be futile because prices would just follow by the same level, and then some. To get out of this mess, you have to increase supply of home grown essentials - namely energy and food. While exporting more to correct the trade deficit. It takes 25 years of bad policy to get where we are today. Of course, it’s a global problem, but the low wage culture, lack of home grown energy and a dormant economy don’t happen overnight. So they take decades to correct.

There is no point questioning the reality of inflation now, it is real. The time to question to ask questions was when generation defining bad choices were made, like introduction of tax credits instead of making employers pay market rate wages, scaling back energy storage and not building nuclear power facilities earlier, printing £450bn during Covid to pay for lockdowns when healthy people were locked up.

Please don’t head down the MMT conspiracy theory rabbit hole. Its proponents on the internet are as bad as the Freemen on the Land.

Raising wages now would be futile because prices would just follow by the same level, and then some

Raising wages in the UK would have hardly any impact upon the cost of fuel. The cost of fuel is mostly governed by the wholesale price on the international market, wages are marginal by comparison.

Raising wages will not increase inflation, unless wages go up there will be less money to spend which will mean less money to spend after all bills are paid & could mean loss of jobs in the areas people spend disposable income. Companies can afford to increase wages but they choose profits instead & pay themselves massive salaries & dividends. They should be investing in their workforce through training, equipment & paying them a good wage. Inflation is caused by the increasing energy costs, the price of oil, raw materials, food production, the rise in house prices, transport & public transport. The retail price index uses the prices of a selection of goods to gauge how much prices have increased.

Are you absolutely sure you have a physics degree OP?

Wait wat? If you are a business and the cost of employing someone goes up, who do you think the business is ultimately going to pass that cost onto? I understand why people demand higher wages but ultimately it only fuels the problem.

Wow, such little grasp of basics.

Wow such little grasp of basics

I believe inflation is used as an excuse OP but as Mick Lynch says, it's total nonsense.

Inflation is going out of control but wages have been flat for the last 10 years or so. Therefore there's clearly no correlation with the current crisis.

However, under more normal circumstances it is probably true

Inflation is going out of control but wages have been flat for the last 10 years or so. Therefore there's clearly no correlation with the current crisis.

The immediate cause of inflation at the moment is largely external factors such as fuel price but if it is followed by wage rises then that will inevitably cause an upward spiral of continuing inflation rather than one bump.

There is no easy answer, but it's not a scare tactic.

It seems like all the news does these days is fear monger and manipulate to their own interests so I wouldn’t be surprised if reporting on inflation is being used to scare. But actual inflation and the mechanisms of it is really happening. They have the power to make it easy or hard for the population. They’re choosing hard to keep a few super rich people rich. The fear mongering papers encourage people to feel disempowered and depressed instead of able to contest this. Stop doom scrolling and write to your mp?

Most people on here seem to think I'm tin hat crazy but I agree that the narrative of newspapers is that of fear.

'The people don't want war, but they can always be brought to the bidding of the leaders. This is easy. All you have to do is tell them they are being attacked' The Nazis realised it, religion realised it, control of the masses is easier through fear

We are led to fear something all the time and manipulated until we do so.

Global warming, now climate change as it wasn't warming enough
terrorism, which has taken the back burner since pandemic which is now over so inflation and energy .
Energy is an interesting one, it is never the price per until that is quoted which is indeed going up but the maximum possible amount for the biggest family/house so that people in one bed insulated flats seriously believe their bills will be 6k come April.

AIBU to think inflation is a big excuse to keep us in our places? It doesn't need to be this way

Absolutely! Everyone knows that the Gov decides the price of a tin of beans and not the supermarkets!

So are you suggesting if public sector staff had received inflationary wage increases, over the last 10 years, it would have resulted in a perpetual cycle of inflation? I don't think so.

Increasing wages, in line with inflation, doesn't result in further inflation. This is all people are asking for.

Although I appreciate that suddenly giving people backdated increases to make up for past years is a different thing altogether.

Yet despite what the government are saying, my police friend has just received a 10% rise. So they're clearly saying one thing and doing the complete opposite.

I don't know how many people are on minimum wage though? Would it trigger more problems if those at the bottom has a pay rise?

This. 1000% this. One of few sane posts amongst all these energy/inflation/wages doom threads.

That doesn’t follow at all.

Inflation is driven by a range of factors, and increasing wages is one of them.

Yes, in general, because those on the lowest wages have the greatest marginal propensity to consume.

An extra pound to a low-income family gets spent, an extra pound to a very high-income family probably gets invested.

Increasing wages, in line with inflation, doesn't result in further inflation. This is all people are asking for.

Of course it does. It perpetuates the cycle. How the heck can it not?
Maybe things would be better now if wages had risen more in the past (not just the public sector by the way) and we'd be in a more robust situation and able to deal with a one off bump. Maybe they'd be better if there hadn't been massive house price inflation. Maybe....all sorts of things. But we are where we are.

The point is they don't have to pass it all onto the consumer, their shareholders can make a few billion less. And yes, I know that affects pension funds to some degree.

😂

Loads of people are, or very close to it. For example, nursery workers, lifeguards/leisure assistants, library assistants. Retail workers are usually paid a bit more, eg £10-11 an hour.

I am assuming hospitality staff are paid the minimum and expected to make it up with tips (which the owners/managers then cream off anyway).

And the millions of small and medium businesses that have no shareholders?

You clearly didn't live through the 70s OP like some of us did.