Analysis finds Australia’s inflation being driven by company profits, not wages
1–10 of 316 posts
Re: Analysis finds Australia’s inflation being driven by company profits, not wages
#2what about the money printing
Re: Analysis finds Australia’s inflation being driven by company profits, not wages
#3Inflation is caused by the central bank failing to hit its inflation target.
Re: Analysis finds Australia’s inflation being driven by company profits, not wages
#4The wage-price spiral theory of inflation is bunk. Inflation is caused by the devaluation of excessive printing of money.
Re: Analysis finds Australia’s inflation being driven by company profits, not wages
#5The wage-price spiral theory of inflation is bunk. Inflation is caused by the devaluation of excessive printing of money.
Nope.
That’s well known bunk from alt-economics. Convenient to Austrians and Libertarians who get to blame the government (again), but wrong.
Money supply is only one factor in a complex system.
Re: Analysis finds Australia’s inflation being driven by company profits, not wages
#6The wage-price spiral theory of inflation is bunk. Inflation is caused by the devaluation of excessive printing of money.
Central banks have been printing money for years (quantitative easing, "whatever it takes" , etc) and there was no inflation.
Re: Analysis finds Australia’s inflation being driven by company profits, not wages
#7By its nature, the strong two-tier economy that exists within Australia is not captured within analyses like this.
The “law abiding” tier that pays employees the award rate, pays something resembling proper GST & income tax, and doesn’t use Proprietary Limited tricks to escape long-term liabilities — the companies in that tier are suffering (especially the smaller ones). These companies are captured in these analyses.
Those in the “under the table” tier, such as your local kebab shop or the guy who takes cash to mow your lawn weekly — they are doing OK. Cooking oil may have doubled in price and fuel is now a significant cost, but they had enough margin to absorb that and can now raise their prices as everyone else does, staying healthy. These are “shadow” companies that don’t appear in analyses.
There’s also a strange kind of third tier, which is “lucky bastards” who score a government job or contract. All tiers of government pay stupidly high amounts, and there’s enough money flowing through the government that this tier (group?) is actually a significant portion of Australians. Imagine welding something for $3,000 for a local council, when it should only be $500 normally. The local council isn’t capable enough to push for reasonable prices.
Oh, and then there’s mining… that’s a whole different thing. So much money there.
At the end of the day, if you’re a small or medium (so 1-200 employees) business that does things properly (pays taxes, stays compliant, and charges honestly), you’re completely screwed.
Re: Analysis finds Australia’s inflation being driven by company profits, not wages
#8The wage-price spiral theory of inflation is bunk. Inflation is caused by the devaluation of excessive printing of money.
Central banks have been printing money for years (quantitative easing, "whatever it takes" , etc) and there was no inflation.
But the money supply was kept roughly in line with the growth of the economy. Inflation only occurs if the total money supply grows faster than the economy. There's some nuance over how much money is actively being spent vs sitting in savings, but the broad strokes of it is economic output divided by money supply.
Re: Analysis finds Australia’s inflation being driven by company profits, not wages
#9The wage-price spiral theory of inflation is bunk. Inflation is caused by the devaluation of excessive printing of money.
Every time your local bank issues a loan, it creates money out of thin air.
Re: Analysis finds Australia’s inflation being driven by company profits, not wages
#10I can't believe how people buy this "wage driven inflation" thing. The asset owner have had insane gain due to X, mostly money printing I guess, and when wages start to increase it is a problem? Workers are just balancing out supply and demand ...
Inflation is not driven by "company profits" either most likely. It just looks that way when wages are getting a smaller share of the inflation nominal gains than company profits.