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Comment by shmatt | Hacker News Reader

Now imagine every employee in your city, regardless of industry, got a 7% inflation raise. This would then push prices up even more. Pushing inflation up even more. Pushing even more inflation raises next year.

Rinse. Repeat. It's a never ending loop of wage inflation

The only way inflation stops, or even deflation starts, is if someone "gives up" on inflation adjustments

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This is only true if a 7% increase in wages causes at least a 7% increase in inflation, which it doesn't. The effect you're describing doesn't shoot up forever, but approaches a limit.

It's not just wages. Everything that costs money goes up "because inflation". Thus more inflation next month. This is exactly what we're going through with every month the new YoY becoming higher and higher

Higher YoY inflation announced -> Companies raise prices on everything -> employees demand an inflation raise -> Higher YoY inflation announced -> ...

> Higher YoY inflation announced -> Companies raise prices on everything -> employees demand an inflation raise -> Higher YoY inflation announced -> ...

Yes. This is exactly the cycle that approaches a limit (all else being equal). Inflation-adjusting wages doesn't make inflation keep going up indefinitely.

Companies are welcome to stop increasing prices, but I'm not going to fall on my sword re salary negotiation to make a tiny contribution to stopping inflation.

I don't care about every employer lol. My interest is my raise. If I can continue outpacing inflation, then I continue winning. How do you think rich people stay rich?

This is not correct.

The underlying causes of inflation are the monetary levers that the government controls. These are money printing and taxes.

Another option is that the Fed stops printing trillions of new dollars out of thin air.

Immigration was restricted for the expressed purpose of raising wages. It was a huge campaign promise but people didn't notice the inflation until Jan 20, 2021.

This math doesn’t check out

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