Quote:
Originally Posted by jfman
Boris warning higher wages mean higher inflation.
So the high skill, high wage economy was another lie?
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Careful … you’re exposing your limited understanding of economics a bit here.
A high skill, high wage economy (sans high inflation) is achieved by productivity improvements and rebalancing the economy so more of its output is high-value goods and services. Much easier to say than to do, but it is possible and it is a valid policy objective.
A wage-inflation spiral is a different beast altogether, with each measure increasing in response to the other. We spent a chunk of the 1970s and 80s stuck there. Avoidance of that is another valid policy objective.
There is no inevitable link between high wages and inflation. It’s the cause of the high wages that’s of interest.
Naturally, you may take issue with how likely present government policy is to deliver an economy whose productivity levels and goods values could support high wages. Low productivity is a British disease, which with regards to the latest OECD forecasts, has been a persistent problem of ours for decades.