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Comment by jonnycomputer | Hacker News Reader

Some people seem to think that you can't raise wages without stealing those wages back with higher prices. Deeply cynical world view, imo. More importantly, its missing the fact that there are other, mitigating, factors that go into inflation, namely productivity.

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Which is funny, because we've seen prices go up despite wages remaining stagnant for the most part.

Now you know what it's like to live in some Eastern European countries, at least to a point.

Also one of the biggest downside of the digital single market of the EU. Can't discriminate so people in Bulgaria, Romania, Hungary etc. have to pay the same price for software, games, subscription services as people in Luxembourg, Denmark etc.

But hey at least the politicians in Brussels are happy

I live in one of those countries and it is as you say, and more, really. Most PS5 games cost upwards of $80. This wouldn't be a problem if we were like Germany, however with minimum wage closer to ~380 euro, and I get paid around 450, it takes a toll.

But that's just for games, gas prices rose exponentially as well as price of used vehicles. The EU also imposed these emission regulations and now our vehicles will be banned from entering specific places unless it has a higher emission standard, which does not correspond to the EURO numbering. This forces you to look for newer cars, which are either more expensive or not as big to fit your needs. Even I will be buying a not so cheap car that is 2008 model, rather than say 2014.

The same is true within US, where earnings and wealth varies a lot between the states and prices for digital goods are the same.

Yes, but we have redistributed systems that keep that from getting too out of whack. And we hear rich states complain about all their money going to poor states, but that is how you keep a union together.

Just one more argument, among many, for the EU to adopt a redistributive system to minimize the economic imbalances within their union. Big part of the reason for the Greek financial crisis of a decade or so ago. An economic union has to be an economic union.

This means nothing. If you study prior periods of inflation, prices always go up first, and wages go up after a delay.

I think the main complaint is that capital (investors) is eating a much too large share of gains in productivity or from other sources, because capital has too much power.

Higher wages can only be clawed back from the shareholders.

Well that is why I think that income (either through minimum wages, basic income cash transfers, of union contracts) should be explicitly linked to productivity not CPI. In an ideal world individual productivity should increase wages proportionate to the increased value produced, but--as you say--that doesn't seem to be happening.

The only deeply cynical part of this is the idea that it's some kind of nefarious plot to steal those wages back. It's not, it's a simple and direct consequence of the fact that in order for people to buy things with their wages those things must first be produced. Right now the world has hit current production limits on critical inputs like energy, raw materials, and semiconductor devices, as well as having labour shortages in many countries. There simply isn't enough stuff for people to be able to buy as much with their income as they used to, and so income is falling behind inflation. Pushing up wages doesn't fix that, it just means that inflation has to be even higher in order for demand to match up with what can actually be supplied. It's not possible to make workers as a whole better off in real terms this way, except maybe by making retirees so poor they're forced back in to work to survive as well.

All else being equal, there is some maximum number of workers that can receive wage increases before inflation in consumer goods rises a tenth of a percent. Imagine that we held a national lottery and the winners of the lotto received a wage increase. Those people could, indeed, buy more.

We need to bridge the gap in the dialog between the lived experience of the individual worker and the statistical experience of the nation's workers.

But there is unfairness in this. The raises are the carrot on the stick, and the managers are sitting on the back of the donkey holding the stick.

A website full of bosses arguing against wage rises for workers? Truly shocking.

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