Inflation - what is it?

[pikesfan]

And I am sorry to say but if Mom and Dad don't have enough initiative to go find a job that pays above minimum wage, we have a problem.

What does their initiative have to do with anything? I may have the initiative to find a new official patch for BtS to replace the Bhruic patch, but that doesn't mean there is one, or that Firaxis will be moved to provide one. I neither have the power to compel such a thing be done, or the influence to persuade them to provide one, or ability to manipulate them so they think that complying with my wishes is in their interests. All I can do is wait for an official patch, or do without; they have the power, I have none. Same with jobs.

I understand the argument that having a minimum wage makes employers reluctant to hire people who are not worth that wage but you have to have something to prevent employers from imposing a wage that will not keep the employee alive. And I say "impose" because it is just ludicrous to speak here of two sides negotiating. In most circumstances the employer has all the power here; the would-be employee has none.

 

[Silence101]

What does their initiative have to do with anything? I may have the initiative to find a new official patch for BtS to replace the Bhruic patch, but that doesn't mean there is one, or that Firaxis will be moved to provide one. I neither have the power to compel such a thing be done, or the influence to persuade them to provide one, or ability to manipulate them so they think that complying with my wishes is in their interests. All I can do is wait for an official patch, or do without; they have the power, I have none. Same with jobs.

I understand the argument that having a minimum wage makes employers reluctant to hire people who are not worth that wage but you have to have something to prevent employers from imposing a wage that will not keep the employee alive. And I say "impose" because it is just ludicrous to speak here of two sides negotiating. In most circumstances the employer has all the power here; the would-be employee has none.

It does mean that you could take it upon yourself to learn, to do, and to create one yourself. It may take time and effort, but if it was important enough to you, you'd find a way to do it. People sell themselves short when they fall into this idea that they're victims of circumstance.

 

[mrt144]

Inflation is the government's printing more money so that your savings decrease in value and your real income drops. It is a clever method of stealing and the populace is much more amenable to being fleeced this way than by the forecful tax gathering as done by the crude ancient civilizations.

it is also a convenient way to eliminate debts in said currency

 

[Certain Death]

I'm sorry King Flevance, but that's just not the whole truth! Increasing minimum cannot be soley held accountable for increasing inflation! Certainly if more pepole have more money prices will increase. An increase in demand will result in a supply shortage ergo prices increase and find a new price equilbrium, but to blaim it on one factr is naive. Inflation is a complex beast and if the poorest in society deserve a better deal.

 

[Positronic]

I never said it was the sole contributer. I said it is a factor. If you don't belief it is a factor - dont simplify, elaborate.

Increasing minimum cannot be soley held accountable for increasing inflation!

Did you even bother reading the thread?

Certainly if more pepole have more money prices will increase. An increase in demand will result in a supply shortage ergo prices increase and find a new price equilbrium, but to blaim it on one factr is naive. Inflation is a complex beast and if the poorest in society deserve a better deal.

Obviously. If we make minimum wage $10 billion, the price scheme will readjust accordingly so that the "middle class" now makes $1 trillion and a candy bar costs $15 billion. How does this help? The real value of wages and prices remain constant. And again, no one is blaming it on one factor. Reread the thread, please.

 

[Willem]

One of there main ways of doing this currently is raising minimum wage.

That is the most simplistic definition for the cause of inflation I've ever come across. It's absolutely ludicrous to blame it all on the low income worker. What about these corporate execs who keep asking for pay raises and bonuses year after year. A $100,000 a year pay raise is going to have a far larger effect on inflation than a 25 cent increase in the minimum wage. You must really miss George Bush, it's so obvious you're a dyed in the wool Republican. And hopefully you're not heading for some economics degree since you clearly have no grasp as to what really goes on out there.

 

[King Flevance]

Haha. I love how I keep getting called a republican and yet not only do I mostly lean democrat but it was the democrats that were pushing the hardest for the minimum wage increase. Blue and Red! Black and White! Hehe. Yay labels! Who cares, anyways right? Actually, I miss Clinton. I ain't heading for an economy degree. Hell no, not with today's economy. Hehe. I'd be wasting my time. It's well known that today's top economists have still yet to figure out the cause of the so called "recession" going on in the states today. They have no idea. You can contribute it to a little here and there overall but no one knows the direct cause. I personally suspect media. After 9-11, it was all over the news unemployment rates were skyrocketing. Soon after the news started shouting "recession, recession, recession!" Scared the crap outta people. So they stops spending money. By spending not spending money, they caused a recession. (Now, please see that statement for what it is. I am not saying hype alone caused the recession just that it fueled an already bad situation.)

That is the most simplistic definition for the cause of inflation I've ever come across.

And I found it mildly entertaining to post. Just for the record statements like these "blame it all on" and such make you guys seem like republicans to me. Black and white labeling. (How many times have people took what I wrote and said I am stating that all inflation is due to minimum wage.) Of course THAT is ludicrous. But I never said it. And I find it rediculous that so many people keep reviving this thread for the sole purpose to inform me it is ludicrous when I NEVER said otherwise.

A $100,000 a year pay raise is going to have a far larger effect on inflation than a 25 cent increase in the minimum wage.

For one thing the most recent minimum wage increase was for around $2.10 Now spread that across the nation to every minimum wage job.
Man, there really is alot more to this I could go into but I don't wanna go into otherwise I would be on an economic message board rather than one about Civ. The line you quoted was a "semi"-joke. I purposely simplified it. I had no idea that 1 person asking for my explanation of why raising minimum wage was a bad idea for the economy would spawn into so much ludicrous and unexplained responses as to why I was wrong. I guess the opposing arguement is that I am just simply wrong. No sound arguement needs to be made past that.
I have stated why minimum wage does play a factor into inflation. But my main arguement is that it actually hurts those that it promotes it is trying to help. Heck, it actually hurts everyone.

EDIT: I am lower middle class by the way. Since we're trying to size me up.

 

[Willem]

But my main arguement is that it actually hurts those that it promotes it is trying to help. Heck, it actually hurts everyone.

A raise in the minimum wage is the last thing to happen after inflation has run it's course. It's an acknowledgement that the working poor are losing ground to the cost of living and need a boost in order to maintain a decent standard of existance. It's not a cause of inflation, it's a result. Inflation starts at the top with corporations and entrepeneurs trying to squeeze out more and more profits from their products/services, then it gradually trickles down to lower economic circles with workers demanding better wages in order to keep up. You don't need an economic degree to be able to see that, just common sense.

 

[xchen08]

A raise in the minimum wage is the last thing to happen after inflation has run it's course. It's an acknowledgement that the working poor are losing ground to the cost of living and need a boost in order to maintain a decent standard of existance. It's not a cause of inflation, it's a result. Inflation starts at the top with corporations and entrepeneurs trying to squeeze out more and more profits from their products/services, then it gradually trickles down to lower economic circles with workers demanding better wages in order to keep up. You don't need an economic degree to be able to see that, just common sense.

Wait, what? While the minimum wage is only one factor among many that increases inflation, and it pales before such things as deficit spending and loose monetary policy, your explanation is absolutely absurd. There is simply no link at all between increased corporate profits and inflation, and neither an economics degree nor common sense would say otherwise.

On topic, how do you disable inflation? I don't much like it as it distorts the tradeoff between beakers and gold. What happens if you do disable it? Presumably you get tons of money in the end game, but the AI would also have more money and things should balance out right? Anyone have experience in this?

 

[Willem]

There is simply no link at all between increased corporate profits and inflation, and neither an economics degree nor common sense would say otherwise.

Here in British Columbia we've just gone through a real estate boom. Speculators would buy up a property and six months later flip it for a nice tidy profit. As a result real estate prices more than doubled in the space of a few years and the average worker can no longer afford to buy a house in this area. As a result of this activity, rental costs have also doubled. So I beg to differ that profiteering has nothing to do with inflation. Yes government policies have much to do with it as well, but to say that's the only cause is also simplistic.

 

[King Flevance]

But that is the backwards thinking that has the economy spinning its wheels. Because there IS a cap to the amount of profits you can squeeze out of any said products/services. It's just not predetermined. As I said before the answer is NOT raising minimum wage it is to seek out ways for competition to be more abundant. If you are charging too much people will quit buying your crap. It's the entire idea that the Wal-mart abomination was built on. By raising minimum wage, you allow the "cap" on the profiteering to be raised - moreso than minimum wage was the previous boost. Because the price of every thing goes up. The working poor actually only see about 1 maybe 2 years benefit to the increase and then times are harder than they were before the increase. But not just on them, on others too because the guy making 9 an hour in the old economy didn't get a 2.10 raise to adjust. In that 1 to 2 years, he probably got another $.50 to $.80 IF he is LUCKY and works for a good company. Most won't even get that. So he actually got demoted while minimum wage workers got a large promotion. AT least for a year or two then they are back to where they started or worse.

If you keep trying to squeeze more and more profits, you are doing 1 of 2 things if not both.
1) Raising your prices which consumers do not like and if raised enough they will not buy.
2) Not compensating your workers thus you will probably have a large turnover rate. (A problem currently plagueing many businesses today.

Under your arguement, 2 is the arguement behind raising minimum wage. But now you are dealing with a whole new economy. Of which your workers are paying more money for EVERY purchase in about a year or 2. That isn't helping its just an illusion of helping. But ultimatley it is hurting them. When rent, groceries, utilities, luxury items, ...everything goes up in price within the next year to accomodate the new levels of cashflow circulating. A raise like 2.10 an hour to every minimum wage job will make a noticable infraction on the economy that is as large as the U.S.'s. Especially, with it being based on capitalism.
You're just ceasing to follow the formula/logic all the way through as do most people that vote yes. Inflation results in raise in minimum wage, which leads to a new economic model, which leads to a higher prices, which leads to inflation, which leads to a raise in minimum wage, etc.

Obviously raising minimum wage solves nothing. What would solve this issue is encouraging a more competative market. Competative pricing, competative wages, just competition. But first you gotta get out of the "box" that the cycle is the answer. Because the cycle is bringing everyone down, except those on top. And its just making them more fierce.

Speculators would buy up a property and six months later flip it for a nice tidy profit. As a result real estate prices more than doubled in the space of a few years and the average worker can no longer afford to buy a house in this area. As a result of this activity, rental costs have also doubled. So I beg to differ that profiteering has nothing to do with inflation.

But that is an example of legal profiteering.

 

[xchen08]

Here in British Columbia we've just gone through a real estate boom. Speculators would buy up a property and six months later flip it for a nice tidy profit. As a result real estate prices more than doubled in the space of a few years and the average worker can no longer afford to buy a house in this area. As a result of this activity, rental costs have also doubled. So I beg to differ that profiteering has nothing to do with inflation. Yes government policies have much to do with it as well, but to say that's the only cause is also simplistic.

That is called a real estate bubble, and has nothing to do with corporate profiteering. Indeed, there are examples of such long before the rise of capitalism and centuries before the first corporations. And for that matter, as a localized effect, it effects actual inflation far less than the prices of certain commodities, petroleum being the primary example, or for that matter, the minimum wage. And no, government policies are not the sole cause of inflation, but they are the primary cause, completely overshadowing every other cause other than the price of oil. The link between the money supply which is fully controlled by the government and inflation is well documented.

 

[Willem]

But that is an example of legal profiteering.

So what's your point? It's still an example of proviteering driving up prices and fueling inflation. Here's another example. Years ago Nike moved all of it's production to third world/developing countries where they could get their products made for dirt cheap. Did their prices go down because they no longer had to pay as much for their production? No they continued to climb because the public was stupid enough to be willing to pay $200+ for a pair of brand name running shoes. They milked every cent they could out of their products and as a result the cost of footwear in general went up. They set a new standard for prices in that area and many of the other footwear companies followed suit.

 

[Willem]

And no, government policies are not the sole cause of inflation, but they are the primary cause, completely overshadowing every other cause other than the price of oil. The link between the money supply which is fully controlled by the government and inflation is well documented.

During the 8 years that Clinton was president and the American government was posting steady surpluses and engaing in responsible fiscal policies, did prices come down or even stabilize? No, they continued to climb. Here in Canada, up until recently, we've been posting years of record surpluses yet that hasn't stopped inflation from occurring. Government policies may compound inflation but they certainly aren't the cause. And how does flipping real estate for the sole purpose of making a profit not fall into the category of proviteering? You seem to have a very narrow definition as to what that entails.

 

[Positronic]

Clinton was president and the American government was posting steady surpluses and engaing in responsible fiscal policies

Stopped reading after this. The fact that people believe this crap sickens me. Do some research, please.

 

[Willem]

Stopped reading after this. The fact that people believe this crap sickens me. Do some research, please.

Well fine I'll stick to the Canadian example then. That still doesn't change the fact that government policy is not enough to halt inflation, it will continue regardless. Bad policies just make things worse.

 

[thekaje]

During the 8 years that Clinton was president and the American government was posting steady surpluses and engaing in responsible fiscal policies, did prices come down or even stabilize? No, they continued to climb. Here in Canada, up until recently, we've been posting years of record surpluses yet that hasn't stopped inflation from occurring. Government policies may compound inflation but they certainly aren't the cause. And how does flipping real estate for the sole purpose of making a profit not fall into the category of proviteering? You seem to have a very narrow definition as to what that entails.

lol. Surpluses and deficits in themselves don't matter. The government pays a lot of its bills by printing money. This is the most common cause of inflation. There is always inflation because the alternative (deflation) is considered to have far more dire consequences and is easily avoided by a money-printing government.

Ever wonder why we rarely get deflation these days? It's because we started printing our money. If you look back at the days of the gold standard, whether there was inflation or deflation was determined almost entirely by the supply of gold.

 

[thekaje]

Well fine I'll stick to the Canadian example then. That still doesn't change the fact that government policy is not enough to halt inflation, it will continue regardless. Bad policies just make things worse.

Inflation is easy to stop. It will stop if we stop printing money. But this would be bad for other reasons.

 

[PutCashIn]

I cant really be bothered with 4 pages of economics, but if it hasnt been mentioned, theres an offset to 'minimum wage inflation' with the whole I get a dollar, save 10 cents and spend 90c so now the economy has experienced 1.90 worth of trade. So more income = proportionally more spending, despite a one to one increse in cost/price.

And since there are few, if any, perfect economies/markets, saying 'no mimimum wage allowed' is also a fallacy, as one of your prerequisits (perfect economy) is not met...so maybe there is room for a minimum wage.

Furthermore, remember 'your family' was wealthier than you, so when they say 'no minimum wage' and claim theyre poorer 5 years later, maybe check to see your relative wealth gain VS thier relative wealth loss. Biasing thier judgment with this would be a moral hazard, brought about by a. asymetric information leading to b. again, imperfect competition.

In fact, maybe the reason some people dont like 'minimum wage' is because rich people hate profit sharing...

Blah.

Money is an impovershing rationing system, dooming either itself or us to failure. I wonder which. Tune in next lifetime...

 

[PutCashIn]

PS. Deflation is really not a good idea.