Wage Inflation begins to take hold in the UK; Is the U.S. next??

[DrYB/C]

Wage settlements suggest impact of inflation:

http://us.ft.com/ftgateway/superpage...20082218338261

[Starving Steve]

Re: Wage Inflation begins to take hold in the UK; Is the U.S. next??

Of course the U.S. and Canada are going to be next for the wage-price spiral to begin because it clearly does not pay to work.

This whole inflation thing was started by the central banks and their absurd econometric models. The economy needs some inflation, or some line like that. I remember the comment from Greenspan a few years ago.

Well, here is going to be the answer of labour to these stinkers in the central banks who said that we need inflation: "We won't work because it just doesn't pay to do so any longer."

It's cheaper to sit home and leave the car in the garage. :rolleyes:

[ocelotl]

Re: Wage Inflation begins to take hold in the UK; Is the U.S. next??

From 1983 to 1987, Unions in Mexico were constantly pressuring increases to salaries well beyond published price inflation, to no avail. In 1986-7 surfaced the idea of making monthly increases to minimum wage salary. It was not done, and still we are a long way to recover the 1970 acquisitive level of the minimum wage in Mexico.

Up to now, it is estimated that minimum wage should be four times what it is now. Using my reference of end consumer price level (Jan 1981 in MXP = Q1 2008 in MXN) we have that the minimum wage was of 210 MXP in 1981, more or less similar, correcting for price inflation, to 1970.

The problem here is to go from the actual 50.57 MXN to a level 4 times that without making a price inflation disaster. First, the GDP must increase at least to twice the actual, food production and distribution must grow at least 65% more than actual, there must not be a down pressure such as sub employment to make such a measure effective, and current account balance must be held stable, preferably with a budget surplus.

To achieve this, a fundamental change in economic policies must be done first, to improve internal consumption and production, a serious improvement in infrastructure building and a tightening on current account spending, thus, a reduction of unnecessary positions within the government and within state enterprises. And in any case it would take at least a generation to achieve.

Due to my job, I've been in rural areas doing installations and maintenance to satellite stations, and in my opinion, the basic factor needed to improve economical situation within rural areas is basic infrastructure, reliable roads, so the products generated within those areas can be moved more efficiently and cheaper, and without the need of intermediaries. After this basic need, the rest can be achieved easier.