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Comment by g_delgado14 | Hacker News Reader

Increasing wages is itself inflationary. If the costs of a company increase then so too do the price of their product or service. I’m not disagreeing that we shouldn’t increase wages, but I just want to point out that wages and inflation are correlated.

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Increasing wages correlates with inflation, but it's a _very_ weak correlation. In most industries labour does not make up the lion's share of business expenses.

Studying minimum wage increases between 1978 and 2015:

> we find prices grow by 0.36 percent for every 10 percent increase in the minimum wage.

https://research.upjohn.org/cgi/viewcontent.cgi?referer=&htt...

Considering that company profits and the income of the top 20% went up, it seems fair that other income goes up too. There may be some inflation but I think wage earners would still be much better off.

With that logic you might as well pay no one anything because that would increase the prices. It just doesn't pencil out logically when you think it through. Fact is, wages are historically depressed. We've shown you can have higher ratios of wages to prices in the past, we've just never bothered to keep the ratio maintained as we've seen GDP growth over the years, and have instead favored having the capital class to gobble up the resulting gains instead of seeing more redistribution of all of this accumulated wealth as in years past.

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