More jobs means inflation goes up? Clip from 25th Hour
Does that make any sense?
More jobs means less people looking for jobs (high employment, low unemployment)
Means harder to find qualified people (because they're employed)
Means you need to raise wages
Means inflation goes up.....(what?)
What if most jobs don't require quality and skill, and therefore only certain sectors need to raise wages, while other industries are saturated with workers which can lower wages? Why does raising wages mean inflation goes up? What say do employers have over how much money is printed or lent?
Where does all the extra money come from to pay your workers the extra money? If your product is in demand, you will have the money to pay up for better workers. Left alone capital flows efficiently to where it would benefit the economy best.
Side note, more people working ideally means there are more products and services in the economy, thus prices shouldn't rise and actually should be falling.
Rising nominal wages is a symptom of inflation, not a cause. If a company is successful and needs to hire workers away by paying them more money, if the money supply was not increasing, that would mean that company's earnings came at the expense of a less successful company who had to cut someone's nominal wages.
This doesn't mean that you need a growing money supply for real wages to increase. On the contrary, the falling prices that accompany sound money means that real wages increase when the wages don't fall as fast as prices do.
that's what I thought too, thanks.
Originally Posted by The Gold Standard