dave_the_nerd
Lifer
- Feb 25, 2011
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Fundamentally, everybody wants to make more money this year than last year, for doing basically the same thing.I think it's a combination of things. Companies are greedy so if minimum wage is higher then they raise prices so they can make the same, or more profit than before. Sometimes they raise the prices anyway, because they just want more profit. People blame government for inflation, and they are definitely a contributor due to some often bad monetary policies (the budget will balance itself!), but corporate greed also is a contributor. The first companies to blame would be utility companies, insurance, municipalities (property taxes) and basically any company that business/people pay bills to every month. Because if price of those things goes up, then it basically snowballs into making everything else go up. Gas/diesel is a big one too, that affects everything.
$20 minimum wage seems absurd though. While a big corporation like McDonald's can easily afford that, a small business, not so much. So they have no choice but to let people go and possibly reduce their hours of operation due to not being able to afford the staff to run it. I think what needs to be tackled dead on is inflation itself. Raising wages is just a temporary bandaid solution if the costs of living/operating and price of everything are only going to keep going up anyway.
A laborer will argue that they're more experienced and therefore worth more. On the other end, an investor will argue that the company needs to make more money than last year or it's not making progress, and they'll put a buddy on the board or in the CEO slot to cut jobs and outsource core competencies until that happens.
Some of the things you mention as drivers of inflation are symptoms, not drivers - for instance property taxes are mostly determined by needs - the cost of services that the municipality provides, from school budgets to snow plowing & police salaries. (Again, a bunch of people who want to make slightly more money every year for doing the same thing, while burning fossil fuels to do it.)
Also, most of us don't have the option of simply demanding more money for our labor arbitrarily, so I'd argue that when a specific bill increases, most consumers have to eat that cost, and it doesn't really "snowball" any further than that, except inasmuch as industries that rely on recreation/discretionary spending (movie theaters, travel agencies, etc.) will see a drop in revenue.
There's nothing fundamentally bad about creating value, and money is just an abstraction of value. I can "create value" w/ $200 of wood by making it into a cabinet that somebody might pay $300 for, for instance. If I turn around and sell that cabinet, great, I net $100.ff
But if enough people create enough value, when supply of certain things is constrained people with extra cash create inflation by trying to outbid each other for the limited supply of things they need. What we saw in 2022 was the equivalent of dealer markups on in-demand cars, applied to every possible good and/or service. And the amazing thing is, we have those MFers on tape admitting to basically jacking up prices on everything because they figured they could blame "inflation" and make record profits. And they did.