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7/10/2008

Wage increase will cause inflation

Yes, this is true and nothing can be more true than this. Wage increase will cause inflation. To be specific, worker's wage increase, not any other wage increase. The logic, there are so many workers. And if employer gives one worker $20 increase per month, you know how much more money will go into the market. Sure it will cause inflation. Nasi lemak and chicken rice demand will go up and hawkers will quickly raise their prices. Other things can increase no problem. When other things increase, the workers will have to pay more for them. So their disposable income will come down and they cannot anyhow spend. So less demand for food and necessities. So prices will not go up and inflation will come down. This is a secret to our success. It's elementary, Watson!

20 comments:

Mockingbird said...

If high wages excerbate inflation, perhaps ministerial salaries should be adjusted downwards to more reasonable levels to counter inflation.

redbean said...

may i disagree? actually giving more increments to ministers is not an issue. and the good thing is that they will not be corrupt and will work harder. a happy worker is a good worker.

anyway, there are only a handful of ministers. so increments going to them will not affect the money supply in the market. further, they will just park it in their savings accounts or fixed deposits. they don't need to spend these increases. they have too much money already. so no effect on inflation.

redbean said...

my apologies for talking cock.

at least i apologise or at least i know i am talking cock.

Anonymous said...

Now the mouthpiece union will have to sell the 'no wage increase' to the workers they represent. Expect the expected story about becoming uncompetitive, employers moving out, jobs moving out and your wife and daughters having to work as maids. It will certainly not be of whether workers will be able to cope with the high inflation without wage increases. Trust our union chief to give a credible story which the 66.66% of Singaporeans will lap up.

Mockingbird said...

Rightly have you said a happy worker is one who is well-paid and works well. Is it any wonder why Singapore is full of unhappy workers who don't work well becos they feel they have been under-paid?

redbean said...

the best part of it is that the preacher believes that the congregation truly believe in the sermon.

Anonymous said...

I've been short-change and will very likely turn corrupt. Please increase my pay NOW or prepare to live with the consequences.

redbean said...

i think you should go ahead. there is no laws against corruption so people will get corrupt freely. it is ok : )

Anonymous said...

Where got corruption? Can you prove it? Nah, we are whiter than white.

redbean said...

we already have a system that is corruption proof. we have copyrighted this and is marketing it to the world.

singapore's way to a corrupt free govt.

Anonymous said...

The law works in mysterious ways!

Anonymous said...

Corruption? We already legalized it.
Trademark and patented. Some other countries are trying to emulate us but they are really infringing our patent, what a brunch of pirates.

redbean said...

this is the best system that we have. and it works.

redbean said...

the danger of any system that uses money as the key motivator is that greed is very flexible and cannot be stopped. once a person gets use to a million, he is going for his ten million, then his 100 mil.

the appetite will just get bigger and the numbers appear to be smaller. how on earth would someone describe $600k as peanuts! i have never seen such money in my life. it is a fortune, a huge fortune to me.

when everyone is talking about millions, often you hear them say, what's a few million, it is a dangerous sign.

only when they get to the state of bill gates, then suddenly he will realise that money is meaningless. but you will have to wait for them to be as rich as bill gate.

WindBreaker said...

Inflation won't be affect by increase of wages. Unless huge income tax had been reduce then that will affect the economy because reduce of tax will create more deficit hence push up inflation. So therefore Sg Govt still can reduce a reasonable tax rate to help the citizen. And also increase of wages doesn't have to do with govt too. It depend on the company that you work for as well if they are willing to increase the salary.

Just my 2cents..

WINDBREAKER

Anonymous said...

We are told by super talent that wage increase will cause inflation. However, this same group of super talent is going to have a super hyper increment at the end of the year. Double standard at its best. No wonder we are always peasants. Super talents always hold us back and we believe them.

Anonymous said...

Careful, or they will send their dogs to bark and chase Singaporeans out.

redbean said...

hi guys and windbreaker,
welcome to the blog.

just posted an article on our secrets to success - how we curb inflation. we must not look at our brilliant policies superficially. look carefully, and beneath it, you will find them very effective and ingenious.

we are possibility the most successful country in tackling the inflation problem.

Windbreaker said...

I tell u increase of wages won't increase inflation. Yes, I understand how you guys feel if they tend to increase tax the main reason is to bring up more revenue which tend to avoid increment of inflation.

Because a country deficit or surplus had effect on inflation. And if a country had huge amount of deficit can be in big trouble. If I not wrong if they tend to increase GST or tax then they try to protect themselves from having high inflation.

So during election period is the most critical period it's observing how each individual had to say or give as a govt in action..Many people can say oh..I can provide this that lower heaps more tax so we had more saving? But in reality will the person really do it in action? That is something which we need to observe. And also lets be realistic.

Like my friends keep telling me vote for this party vote for that party. But I do have to analyse myself as well. Why vote for this party or that party? And also what they say is it true? Will it benefit the public as a whole?And will it benefit us as well? Think of yourself and your family as important too.

What the govt can provide to their citizen is important as well.Like the health care sector, Are people being treated well? Can they afford to pay? What have the govt done to subsidise? How about the transportation/education side? What did govt do to prevent prices from hiking? These are all good consideration.

Seriously, what you guys wanna say..You should try voice out your feelings.

I know the internet may not be a secure site but for me I still voice out what I think is right. And also I believe every individual had the rights to voice out your own opinion regardless of who you are.

redbean said...

agree with you windbreaker. the people, especially the young and educated should express their views about what is happening around us, our lives and our country. it is our right as citizens to say our piece. it is our right to disagree and have different opinions of things.

if we think that we have the best men ruling us, we are very wrong. some are good but many are duds. we all have eyes to see. and many things are not working or appears to be working temporarily.

the high cost of living and cost of everything is going to bankrupt the majority of the people. despite our high savings rate, we have no savings for our old age. now that is food for thought.