Doesn’t Inflation CRUSH the Mininum Wage?

Let’s go to the phones at (617) 830-4750 a
lot of people eager to get on today. Let’s start with our caller from the eight oh six
area code. Who’s calling today from eight oh six hello. How’s it going? Good. Who’s this? My name’s uh, Lamar. Hey Lamont. What’s up? Hey, I just had a quick question. It’s a little
open ended. As you know, there’s a lot of democratic candidates in particular mind,
which is Bernie Sanders talking about increasing minimum wage. Now I know that he and many
others have been trying to do this since the nineties et cetera. I wanted to know even
after he leaves, what we have is a major problem systemic, in my opinion, which is the cost
of inflation or the rate of inflation continues to change. I know that there’s different things
like the fair Labor Standard Act or different acts that were made. I just wanted to hear
your thoughts on do you believe that whoever the candidate is, whether it Bernie or Elizabeth
or whoever should set up an agency or give more power to an agency that’s independent
of Congress to be able to naturally adjust the minimum wage without having to go through
Congress with a great luck, a bunch of foolishness, et cetera? Yeah, I mean, so the answer is yes, the minimum
wage should be indexed to inflation, inflation merely to keep up with inflation. The, the
more complicated element of it is that cost of living is arguably, uh, more difficult
to pin down than national inflation. And that because the minimum wage is very regionalized,
what counts as a living wage in some parts of the country is not in other parts of the
country. So there are some studies which suggest that you should actually tie the minimum wage
to cost of living, which of course is very, very different in different parts of the country
and even within states. And that’s where we should be looking in po both politically and
logistically. That’s much more difficult. Now let me say one other thing, Lamont. We
actually have it pretty good in the United States as far as inflation in my birth country
of Argentina, the inflation is, I mean it’s, it’s been cartoonish for 15 years. It’s crazy
what’s going on there. And in the u s fortunately, yes, there’s a political obstacle to overcome
in terms of getting the minimum wage index to inflation, but at least our inflation is
very, very low compared to what’s going on in countries like Argentina. And it’s not
nearly as big of a problem as it could be. Thank you. I really appreciate your thoughts.
Love you. So keep up the great work. All right. Thank you very much. I appreciate
hearing from you Lamont.

59 thoughts on “Doesn’t Inflation CRUSH the Mininum Wage?

  1. Inflation eats away at all wages and ROI. The dollar has lost some 21percent of its buying power since 2007 (BLS). Indeed, that’s largely because the monetary base, that is to say real money in the real economy, is nearly 4X what it was in 07.

  2. If the cost of living wasn’t so damn expensive people wouldn’t need a $15 min wage but the government refuses to address this

  3. Inflation ran rampant and wages haven't match the increase in cost of living that inflation is responsible for. The argument that things will cost even more after raising wages is greedy, asinine and disgusting that people allow it.


  4. I can see the right's concern that doubling the minimum wage would cause more inflation in prices of basic goods. Small businesses and mass product moving small gains corporations would have to increase prices to keep just the same employees, otherwise they'd have to lay people off and put more work burden on existing employees. There's a lot of goods produced in the rust belt by people making $10/hr starting out.

    This is the argument that led me to believing that a UBI would be a better alternative for businesses and workers, while giving aid to the homeless, under employed, and those who fall through the cracks in the system (especially if coupled with Universal Healthcare). It would likely cause some inflation as well, but far less than increasing minimum wage (see Kuwait UBI 2011). I had previously come to the conclusion that a UBI will be necessary in the coming decades (due to automation), but the conservative argument (as well as Andrew Yang) pushed me into thinking about how it could assist us right now.

  5. Even though it isn't as bad as Argentina it absolutely IS an issue that needs to be addressed. Minimum wage for one worker used to be able to cover the costs and needs of a 3 person family only a few decades ago. Now it can't even cover one person.

  6. What I love about leftists like David Pakman is that neither of the businesses in the thumbnail pay the minimum wage. They pay more. This irony is of course lost on all of you.

  7. The govt knows how to calculate cost of living. All military ppl get an allowance depending on the place they are stationed. So to add to Yang’s plan, make the bah indexed to cost of living in the area the person works, and therefore, cost of living not a problem.

  8. Dismantle big businesses, limit the authoritative elements of corporations, nationalize those which is crucial for societal function, support and limit the size of businesses, seek and eliminate monopolies and syndicates, resolve wealth distributions.

    Minimum wage is just a temporal fix of a broken system.

  9. Dave, we want a high minimum wage everywhere because otherwise people are forced to move to where the work is, creating a feedback loop of lower standards of living everywhere due to over crowded cities and under populated cities

  10. CPI is not reported … it never reflects inflation in any nation. USA deliberately under reports even CPI and wages don't keep up to CPI even the bogus under reported one. Any other nations makes an adjustment OVER inflation every few years … a cost of living adjustment of CPI plus 1-2 % to reflect this USA …. run by 1,000 people has not done this in over 40 years !! CPI is that absurd in the USA that medical which cost 6% of GDP in 1980 … was 6% on the CPI measure …. in 2019 its 20% of GDP and has only a 7% Weighting. Basically workers not only get screwed one way, but every each way and lack the understanding of how far USA has fallen. In 1980 USA wages per hour were identical to Australia at around $3 an hour …. in 2019 Australian ones are $19.80 an hour minimum and USA is $7.25. Ignore the exchange rate to some extent …. as the USD is very strong at the moment and AUD at 10 year lows. Nothing like bribing the goverment and disbanding labor.

  11. The thing is the average person working minimum wage, Is a lady working as a cashier, The average man working in minimum wage a guy working as a driver or uber driver. All could be replace by robots the thing is not to boost minimum wage, the thing is we should be giving everyone over age of 18, 1000 dollars a month. Federal jobs are ok but 1000 dollars a month could mean so much for your community. And well being

  12. George Bush and the Republicans changed the Harris Cost of living adjustment formula. They took out : Housing, transportation, and cost of food. The major things we pay for. Hence no cost of living increases. That's way SSI and wages haven't kept up.

  13. Another part of this I don't see addressed much is inflation/cost of living impacts on those with fixed income (retired, disabled, etc). The SSA cost of living increases that exist now are just not enough to keep up with real world cost increases. It doesn't help that they are also based on nation-wide numbers, not real localized costs. And it's made worse for people on other assistance programs like HUD or SNAP, because an increase to income from a Social Security program means a roughly equal decrease to other assistance. Getting an extra $20 per month from Social Security doesn't help at all when you have to spend all of that to make up for lost food/housing assistance.

  14. More money in supply the less it's worth. When inflation happens your the cost of living goes up and your pay may increase over time, but anything you have in your savings does not increase in supply which forces you to work longer and become more dependent on government. This is a dishonest money system. A system which was backed by gold and during FDRs time in office he FORCED Americans to hand over their gold to the government. The FEDERAL RESERVE NOTE is a note of debt. They're printing money based off of nothing. In the constitution article 1 section 10 clause 1 states…
    No state shall enter into any treaty, alliance, or confederation; grant letters of marque or reprisal; coin money; emit bills of credit; MAKE ANYTHING BUT GOLD AND SILVER COIN A TENDER IN PAYMENT OF DEBTS;… gold and silver will always be worth something, the dollar, not so much. Credit needs to be ended. Credit allows people to live above their means, but causes us to become DEBT SLAVES. if you work to get money and that money has to go to a creditor you are a slave. The borrower is slave to the debtor.

  15. Would tying the minimum wage to cost of living imply a belief that there should be no cost difference to life as a function of location?

    I would think that the minimum wage should be set so that it can get you a living wage anywhere (maybe with a few exceptions that could be dealt with through local or state laws), and that is it. If that makes things easier in some areas relative to others, that is fine – it might even incentivize people to move to an otherwise undesirable location (whether it be for economic reasons, geographic reasons, etc.).

  16. Increasing the min wage to $15/hr is complete madness in the age of automation and artificial intelligence. Millions will be in the streets.

  17. Damn, what an amazing caller: Immediately understood he was on the air, was on a decent cell and didn't have his radio on, asked a very GOOD question with just the right framing and without a bunch of dead air between words, let David answer without interrupting, then thanked him for the answer and his overall work. Call the Inquirer, we've witnessed a UNICORN.

  18. Great question; refreshing to have callers that have put thought and perspective into their question beforehand, as is obvious with this gentlemen.

  19. Inflation is bad and will always be bad for the average person because it is basically devalues the money and makes everything cost more . End the fed, go back to the gold standard and stop QE will help everyone in the long run, this fiat based currency is cancer on a society and until it ends we are all fucked.

  20. Where I'm from (the Netherlands, Western Europe) the minimum wage is automatically adjusted according to inflation.

    There is no debate about this, it's just a thing that automatically happens regularly.

  21. Have you looked at the stock market lately? I think Walmart can take the fucking hit. The problem isn't dwindling profit margins. The problem is corporate greed. These assholes will never have enough money. If it was up to them you'd be working for nothing.

  22. I hear talk about adjusting the minimum wage to meet inflation, but how about we try to avoid inflation entirely. For example, how would you feel if your employer was cutting your wages by 2% every year? Would that anger you? Well, that is what inflation does except it also devalues whatever money you have saved in the bank.

  23. Yeah the poorest people suddenly getting a living wage isn't going to cause significant inflation at all.
    Half of people on welfare in America have jobs. So what do you suppose is going to save America 100s of billions in 'government waste' as opposed to any other libertarian or teapublican plan? Living. Wages.

  24. These trolls think people on minimum wage can actually afford eat at McDonalds and pay rent. There there little one, isn't it passed your bedtime?

  25. Government management of minimum wage is stupid as hell; they should have no authority over such things. I totally agree with this caller on that point.

    But I do think that minimum wage should be managed by sector and location via union negotiation. IF the unions controlled wages, then adult corporate employees (like those at your Walmarts and Macdonalds) would be working for ~25 USD per hour by their fifth year. Should they mandate a 35 hour week, that is 875-900 USD for rent per month at a 25% cost of gross income; 1800 USD for those who have a roommate or spouse working the same sort of position.

  26. Ya know, the military gives a housing allowance that is proportional to cost of living in the region a member is stationed, if they live off base that is. Maybe that could be a starting point for creating a federally mandated but locally adjusted minimum wage based on cost of living.

  27. Bernie's proposal ties the increase in the minimum wage to the increase in the median wage which has, historically, increased at a faster rate than inflation (the CPI).

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