Spud tells us that inflation is merely a one off adjustment. It isn’t a wage price spiral at all. Hmm, OK. So, therefore:
The truth is we cannot afford to not give inflation matching pay rises.
So, Spud’s solution to our not having a wage price spiral is to set one off?
Do think this through. So, we’ve a one off adjustment in global prices – Spud’s insistence – and what does that mean? That we’re all worse off in that one off adjustment sense, right? We’re poorer because those prices have changed. What we consume is now different relative to the price of what we produce. And if we demand that we all be made whole from that adjustment then we will indeed set off the spiral.
And will those inflation-matching pay rises then force prices up? The answer is no, because the increased profit margins out of which they can be paid already exist
Unconvincing really……largely because the people making the higher profits might well not be the people with staff looking for a pay rise. Uncle Vova is making lovely money out of high energy prices but he tends not to pay the wages at Sainsburys…..