Pedals as it shoulds be - Minimum salary and inflation /2
Posted on June 7, 2005
Filed Under Articles |
The post of some days ago (swapped pedals) had been inspired from an article on the Estado de São Paulo, in which the the Workers’ Party (PT, the party of the president Luis Inacio Lula da Silva) was congratulated in order not to have increased the minimum salary. Unfortunately in the following days nobody cared to show to the readers how to increase the wellness (or better how to diminish the poorness) of the people who live with 100 dollars per month without generating a financial crisis.
The main problem is that if everybody thinks that increasing the minimum salary a financial crisis will happen, well, the crisis will actually happen. Therefore one should convince the investor that such a measure would not generate any disaster, and the employers would maybe increase the salary. Nothing new: the salaries of the European workers have been increased, in relative terms, enormously in the last century, without any financial crisis.
In 1800 the salaries in the USA were higher than Europe, and the USA did not have any problem at all. So I discovered that in 1865 someone had already worked on the issue.
If the salary of the workers increases, one can think that these will spent more on necessaries and, if the increase is really high (let’s remember that we are speaking about salaries of 100 USD/month) they will even buy some luxuries.
About the latter, no problem, even if the prices will increase, the worker will buy a little less, but everybody is happy. Therefore we only watch at the necessaries.
When the 30 millions Brazilian surviving with the minimum salary will “invade” the supermarket thanks to the increment of them salary, fighting each other for the last piece of bread and milk and chocolate, the prices will increase, apparently vanishing the effort of the government. The employers are gaining less, because they are paying more to the workers, but the ones producing necessaries will be pretty happy anyway: they are selling a lot more. Therefore one could thing that the producer of luxuries will move towards the more remunerative area. The final situation will be less luxuries produced at the same price, or something less, and more necessaries produced at the same price, or something more.
The only actual difference will be that who was earning 100 USD is now earning a little more, and who was earning 10,000 is now earning a little less…
Comments
Leave a Reply
Subscribe via RSS