Are we starting to see the wage increase vs inflation increase death spiral?

[413x]

If utilities don't drop by at least more than 1/3 we are screwed.
And that would still be significantly above (2x?)what we were paying only a year ago.

That kind of money just isn't available

Only way I even see that is Russia ending the war and.. More importantly.. Its resources being freely traded. And that is the big bug issue I see

Hasn't gas/elec roughly jumped from 1200 to. 3400 in a year (come October)

 

[Stretch]

That’s very sector dependent. I don’t think we’ve seen huge wage inflation in retail for example despite lots of “great resignation” activity, but tech for example it has contributed to very significant wage inflation.

The problem with retail is it becomes economically unviable with significantly higher wages. Especially is arras’s of the country that are less affluent. So instead of wage increases we get business closures.

 

[dlockers]

The problem with retail is it becomes economically unviable with significantly higher wages. Especially is arras’s of the country that are less affluent. So instead of wage increases we get business closures.

Smart gates, self-service tills etc... It is already happening, and not because "lol globalisation" - but because people don't want to do those ****** jobs anymore.

 

[Mr Jack]

The problem with retail is it becomes economically unviable with significantly higher wages. Especially is arras’s of the country that are less affluent. So instead of wage increases we get business closures.

Nonsense. There are loads of countries that have entirely viable retail sectors with much better paid workers than the UK.

 

[Stretch]

Nonsense. There are loads of countries that have entirely viable retail sectors with much better paid workers than the UK.

They do… and so would the UK. It would just be much smaller and more expensive… or is often the case in the UK it finds ways to operate with less workers… e.g. online.

 

[Mr Jack]

They do… and so would the UK. It would just be much smaller and more expensive… or is often the case in the UK it finds ways to operate with less workers… e.g. online

It would be a little more expensive - remember that staff costs aren't actually that big a part of the cost of goods - but there's no reason to believe it'd be significantly smaller. More expensive, however, isn't a terribly big deal: what matters is affordability. And the best way to make things more affordable is to pay people better.

 

[Stretch]

It would be a little more expensive - remember that staff costs aren't actually that big a part of the cost of goods - but there's no reason to believe it'd be significantly smaller. More expensive, however, isn't a terribly big deal: what matters is affordability. And the best way to make things more affordable is to pay people better.

Staff costs are a significant cost of retail goods. Paying people more doesn’t make things more affordable… other things being equal.

 

[Mr Jack]

Staff costs are a significant cost of retail goods.

Typically, they're about a quarter of the price, although it varies a lot depending on what exactly you're talking about. Even if you were double staff's pay you'd only hike prices by about 25%.

Paying people more doesn’t make things more affordable… other things being equal.

This doesn't make any sense. All other things being equal then of course it makes things more affordable for those people, they have more money! Now, of course, other things aren't equal but it's still the case that paying people more makes them more able to afford things. After the UK's prolonged wage slump, pushing up wages should be priority for any government right now. It's a matter of the purest driven idiocy that the current government is planning on pressing down on them as much as it can.

 

[Stretch]

Typically, they're about a quarter of the price, although it varies a lot depending on what exactly you're talking about. Even if you were double staff's pay you'd only hike prices by about 25%.



This doesn't make any sense. All other things being equal then of course it makes things more affordable for those people, they have more money! Now, of course, other things aren't equal but it's still the case that paying people more makes them more able to afford things. After the UK's prolonged wage slump, pushing up wages should be priority for any government right now. It's a matter of the purest driven idiocy that the current government is planning on pressing down on them as much as it can.

The pips are squeaking at inflation of 5/10%. Wages rises now would just throw petrol on the fire.

Money doesn’t make people better off. It’s what you can buy. Without more things to buy, people are no better off. It’s just more money fighting over the same.

The economy is already constrained by it’s ability to find staff. In some sectors it’s dog eat dog, but in retail they have already gone as far as they can with wages.

Everyone I know who runs a retail or hospitality business is looking to get out asap.

 

[Mr Jack]

The pips are squeaking at inflation of 5/10%. Wages rises now would just through petrol on the fire.

The pips are squeaking because their income isn't rising to meet inflation and the dire wage growth the Tories have produced over the last decade and a bit has left the country in a terrible place to handle that. It's the acute problem of people simply not having enough money that needs to be dealt with, not the temporary problem of Brexit/Covid/Ukraine induced inflation. And, yes, rising wages will mildly increase inflation; but that is very much the lesser of two evils. In fact, it's probably not even a bad thing. So long as wages keep up with inflation, inflation itself isn't a bad thing in a heavily indebted society.

 

[Stretch]

The pips are squeaking because their income isn't rising to meet inflation and the dire wage growth the Tories have produced over the last decade and a bit has left the country in a terrible place to handle that. It's the acute problem of people simply not having enough money that needs to be dealt with, not the temporary problem of Brexit/Covid/Ukraine induced inflation. And, yes, rising wages will mildly increase inflation; but that is very much the lesser of two evils. In fact, it's probably not even a bad thing. So long as wages keep up with inflation, inflation itself isn't a bad thing in a heavily indebted society.

Inflation is symptomatic of a disparity between aggregate supply and demand. You cannot sustainably improve the affordability problem by making that disparity worse.

Inflation is always easier to contain the earlier you act. The long term effects off high inflation are ruinous.

 

[Slam62]

Inflation is a symptom of a disparity between aggregate supply and demand. You cannot sustainably improve the affordability problem by making that disparity worse.

Inflation is always easier contain the earlier you act. The long term effects off high inflation are ruinous.

Yes and they always act too late

 

[Dirk Diggler]

Inflation is at its worst level in decades and wages have stagnated for years - high wages are not the cause of our inflation crisis.

Political mismanagement is the cause of our problems, and people need to look beyond the colour of their passport and their fellow citizens the next time they find themselves in a ballot box.

Mick Lynch pointing out the obvious to people who really should know better.

https://twitter.com/x/status/1550414947754168320