this post was submitted on 25 May 2024
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the myth is that increased wages cause inflationary spirals. marx argues in wages, price, and profit that increased wages will lead to increased prices, but with two important caveats.
it's a temporary increase caused by the increased demand for basic necessities and mass produced minor luxuries, but that comes from a decreased demand for high end luxuries and the expenses of the capitalist class due to reduced profit margins arising from the general increase in wages. which means capital will flow from production in high end goods and services into the mass production of consumer goods and services, increasing the supply to bring the price back down to long term equilibrium.
and the general wage increases are necessarily larger than the overall price increases, so even though prices are expected to increase under a marxist model, the workers still gain a net benefit from the wage increases. their overall purchasing power goes up.
so his comment is in line with that. a $0.19 increase in the burrito is trivial compared to the benefit workers received from the payouts.
I've been schooled
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