Here in NL where I live there is this weird concept that the price of housing is not part of inflation. Whereas it is the single largest expense that people tend to have, before food and transportation. This is quite frustrating because people pay more and more in rent, 1000 euros / month is no longer exceptional, which leads to a crunch in the housing market and so combined with the low interest rates they are forced to continue to rent.
You can't win like that, if you're a single earner (because you are single or because only one of two spouses is working) then you're basically going to be squeezed for many years because you can not save enough for a downpayment.
This sort of treadmill is extremely hard to get out of and one false step or bad illness and you're in real trouble.
Meanwhile, rich people get to hand 105K euros tax free to their kids to buy a house of their own, and investors buy condos to rent back out at exorbitant prices because that's the only relatively risk free way of putting their savings to work.
Dutch inflation inclused cost of living (woonkosten) [0] as probably in most (all?) other countries. I read an explanation once. IIRC the actual cost of living did not increase so much. Prices of houses went up while interest rates went down. Rent went up (because inflation based), but by far not as much as prices of houses ;)
88% of minimum wage workers are over the age of 20, with the average age being 35[1]. 36% are 40 and over.
According to this study[2], increases of 10% to the minimum wage are correlated with only a 0.36% increase of prices, and minimum wage increases may cause some prices to decrease, too.
The problem with this is, who gets to say what a nominal dollar is? There are like ten different versions of inflation calculation. It wouldn't be hard to cherry pick the commodities that set inflation low. Or, if you are really devious, you could subsidize only those commodities that are in the index as a loss leader for stuff people actually need.
Personally I would prefer to use a percentage of the 99th percentile of earners. So if the rich get richer, the minimum wage goes up.
This could just be part of the law. In the end it is not that much different than the current situation, every couple of years the minimum wage gets adjusted after looking at the numbers. Having the law state the minimum wage in real dollars and specifying how convert the value would in the end just automate this process and adjust the minimum wage every year or so.
> the current situation, every couple of years the minimum wage gets adjusted after looking at the numbers.
For large values of “couple” (counting the last few back: 2007, 1996, 1989, 1977.) Each of those spread out increases over a few years, but even then there was a wide gap between the last incrrease.and the next adjustment.)
> Wouldn't it be easier to specify the minimum wage in real instead of nominal dollars?
No, because price data (and thus conversion from “real” dollars to actual currency, that is, “nominal dollars", based on some past bemchmark) are only available retrospectively. But you probably want to know what the minomum wage in nominal dollars is before you have to pay someone.
That is not really a problem as long as inflation or deflation is not crazy over a year or so. Just make the minimum wage X real dollars based on method such and such and the numbers from last year.
You would implement that by setting it to $X real and nominal at some base point, then using the CPI to readjust yearly or something. There's no problem knowing what minimum wage is or will be at any given time.
First, the article doesn't describe any causality in either direction. It's simply stating that minimum wage workers are now even more poor now than they were last year; and, more importantly, got poorer faster than we expected them to. Second, a double-fistful of municipalities raising their minimum wage within the last year could hardly have caused significant motion to inflation at the national level.
This analysis is flawed because it uses year-over-year inflation changes. ....but one year ago, we were locking down so production and consumption halted.
A more accurate comparison against data two years ago shows that the change is not so dramatic.
Unfortunately some solutions aimed (on the surface) of protecting workers make inflation worse. Tariffs to protect workers increase inflation. So does occupational licensing. And means based entitlements.
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[ 2.6 ms ] story [ 67.0 ms ] threadYou can't win like that, if you're a single earner (because you are single or because only one of two spouses is working) then you're basically going to be squeezed for many years because you can not save enough for a downpayment.
This sort of treadmill is extremely hard to get out of and one false step or bad illness and you're in real trouble.
Meanwhile, rich people get to hand 105K euros tax free to their kids to buy a house of their own, and investors buy condos to rent back out at exorbitant prices because that's the only relatively risk free way of putting their savings to work.
It's really tough.
[0] https://www.cbs.nl/nl-nl/faq/specifiek/hoe-wordt-de-inflatie...
According to this study[2], increases of 10% to the minimum wage are correlated with only a 0.36% increase of prices, and minimum wage increases may cause some prices to decrease, too.
[1] https://www.epi.org/publication/wage-workers-older-88-percen...
[2] https://www.upjohn.org/research-highlights/does-increasing-m...
You said “average of age minimum wage workers is 35” and your source says “average age of workers helped by an increase in minimum wage is 35”.
No wonder my bullshit detector was going off, and once again it was right.
Yes, but then you couldn't do nothing and use inflation to reduce it without political host.
Personally I would prefer to use a percentage of the 99th percentile of earners. So if the rich get richer, the minimum wage goes up.
For large values of “couple” (counting the last few back: 2007, 1996, 1989, 1977.) Each of those spread out increases over a few years, but even then there was a wide gap between the last incrrease.and the next adjustment.)
No, because price data (and thus conversion from “real” dollars to actual currency, that is, “nominal dollars", based on some past bemchmark) are only available retrospectively. But you probably want to know what the minomum wage in nominal dollars is before you have to pay someone.
A more accurate comparison against data two years ago shows that the change is not so dramatic.