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So the Government have suggested that you shouldn't be allowed to afford your bills. Well, ok, they didn't say that exactly, but the Bank of England and the Government have both suggested that wages should not go up in line with the price hike in cost of living.
Most of this rise in the cost of living is down to the rising cost of utility payments (Gas, Electricity, water etc) and the price of raw materials pushing the cost of food up. And yet the politicians, those people who get paid a ton of money and extra perks, suggest that wages should not go up by as much to allow people to afford these things.
The main reason for this seemingly strange outburst seems to be that the people in charge of the economy don't want to push costs up even more and drive inflation by increasing salaries. However, it isn't a direct correlation and one doesn't automatically affect the other without a fair amount of other factors being involved. As you would expect, unions are already raising pitchforks in anger, and fair enough really.
It seems that the current government either can't see far enough into the future, or they're determined for no-one on a modest or less income to be in a mortgaged house, perhaps they have shares in council houses?
So what do you think of the government and Bank of England advice to employers? Does it make sense to you or does it sound like the Government are panicking, as well as trying to get out of doing anything about it themselves?
Most of this rise in the cost of living is down to the rising cost of utility payments (Gas, Electricity, water etc) and the price of raw materials pushing the cost of food up. And yet the politicians, those people who get paid a ton of money and extra perks, suggest that wages should not go up by as much to allow people to afford these things.
The main reason for this seemingly strange outburst seems to be that the people in charge of the economy don't want to push costs up even more and drive inflation by increasing salaries. However, it isn't a direct correlation and one doesn't automatically affect the other without a fair amount of other factors being involved. As you would expect, unions are already raising pitchforks in anger, and fair enough really.
It seems that the current government either can't see far enough into the future, or they're determined for no-one on a modest or less income to be in a mortgaged house, perhaps they have shares in council houses?
So what do you think of the government and Bank of England advice to employers? Does it make sense to you or does it sound like the Government are panicking, as well as trying to get out of doing anything about it themselves?
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Garin wrote:
> Its basic economics that have been proved time and time again.
> Increasing wages creates inflationary pressure.
Agreed, and I for one agree with the move.
> Its basic economics that have been proved time and time again.
> Increasing wages creates inflationary pressure.
Agreed, and I for one agree with the move.
Seems we're all in agreement then. You, me, the government and the bank of england all agree that wage increases can create inflationary pressure. None of us have suggested its the only factor in inflation though.
It's more debate than disproving. We all know that salary will ultimately affect inflation, but it would be far too simplistic to suggest this was the only or major factor, or that there were no benefits from a different point of view.
Sorry but using micro-economics to try to disprove macro-economics isnt going to work.
Garin wrote:
> Its basic economics that have been proved time and time again.
> Increasing wages creates inflationary pressure. Its ridiculous
> to suggest it doesnt or only does under certain circumstances.
> Obviously its not pleasant for individuals when they dont get
> cost of living wage increases but its far better than having an
> economy thats crashed.
{and what YH said}
You see, that's it, it's basic, it doesn't factor in other variables.
If inflationary pressure is there already then you still have to maintain a working balance that suits the business and the staff. In some ways, the government could be argued as being cautious, but their message was a little muddled. What they needed to say was that businesses should not increase their salary payouts by too much, or should be more cautious, how it came across was that they shouldn't pay out any larger pay increases than usual.
We're not talking about just business with goods and there's no guarantee that keeping a salary artificially low will actually help the economy either. It works both ways, as well. If your staff can't afford to pay their bills and the fuel to work each day then you won't have staff much longer. You can introduce more working from home options in some circumstances, but not in factories or customer facing businesses.
There is also the factor of lower salary that works against the shop owner. If most of the customers in the shop have less to spend, they will provide less income for the shop owner, in spite of any potential price increase to the food.
> Its basic economics that have been proved time and time again.
> Increasing wages creates inflationary pressure. Its ridiculous
> to suggest it doesnt or only does under certain circumstances.
> Obviously its not pleasant for individuals when they dont get
> cost of living wage increases but its far better than having an
> economy thats crashed.
{and what YH said}
You see, that's it, it's basic, it doesn't factor in other variables.
If inflationary pressure is there already then you still have to maintain a working balance that suits the business and the staff. In some ways, the government could be argued as being cautious, but their message was a little muddled. What they needed to say was that businesses should not increase their salary payouts by too much, or should be more cautious, how it came across was that they shouldn't pay out any larger pay increases than usual.
We're not talking about just business with goods and there's no guarantee that keeping a salary artificially low will actually help the economy either. It works both ways, as well. If your staff can't afford to pay their bills and the fuel to work each day then you won't have staff much longer. You can introduce more working from home options in some circumstances, but not in factories or customer facing businesses.
There is also the factor of lower salary that works against the shop owner. If most of the customers in the shop have less to spend, they will provide less income for the shop owner, in spite of any potential price increase to the food.
If you run a shop, and you give your staff pay rises, you need to put the price of your products up to compensate for the extra expenditure you now have. At least, that's what I guess, I'm not really a financial guru to be honest.
Its basic economics that have been proved time and time again. Increasing wages creates inflationary pressure. Its ridiculous to suggest it doesnt or only does under certain circumstances. Obviously its not pleasant for individuals when they dont get cost of living wage increases but its far better than having an economy thats crashed.
So the Government have suggested that you shouldn't be allowed to afford your bills. Well, ok, they didn't say that exactly, but the Bank of England and the Government have both suggested that wages should not go up in line with the price hike in cost of living.
Most of this rise in the cost of living is down to the rising cost of utility payments (Gas, Electricity, water etc) and the price of raw materials pushing the cost of food up. And yet the politicians, those people who get paid a ton of money and extra perks, suggest that wages should not go up by as much to allow people to afford these things.
The main reason for this seemingly strange outburst seems to be that the people in charge of the economy don't want to push costs up even more and drive inflation by increasing salaries. However, it isn't a direct correlation and one doesn't automatically affect the other without a fair amount of other factors being involved. As you would expect, unions are already raising pitchforks in anger, and fair enough really.
It seems that the current government either can't see far enough into the future, or they're determined for no-one on a modest or less income to be in a mortgaged house, perhaps they have shares in council houses?
So what do you think of the government and Bank of England advice to employers? Does it make sense to you or does it sound like the Government are panicking, as well as trying to get out of doing anything about it themselves?
Most of this rise in the cost of living is down to the rising cost of utility payments (Gas, Electricity, water etc) and the price of raw materials pushing the cost of food up. And yet the politicians, those people who get paid a ton of money and extra perks, suggest that wages should not go up by as much to allow people to afford these things.
The main reason for this seemingly strange outburst seems to be that the people in charge of the economy don't want to push costs up even more and drive inflation by increasing salaries. However, it isn't a direct correlation and one doesn't automatically affect the other without a fair amount of other factors being involved. As you would expect, unions are already raising pitchforks in anger, and fair enough really.
It seems that the current government either can't see far enough into the future, or they're determined for no-one on a modest or less income to be in a mortgaged house, perhaps they have shares in council houses?
So what do you think of the government and Bank of England advice to employers? Does it make sense to you or does it sound like the Government are panicking, as well as trying to get out of doing anything about it themselves?
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