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UK workers must accept lower pay deals to help beat inflation, says Bank ratesetter
(www.theguardian.com)
this post was submitted on 08 Feb 2024
127 points (97.7% liked)
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This could only work if inflation were driven by wages.
If the UK is anything like the rest of the world right now, then that is not the cause. Supply shortages are.
So they would have to either:
A) accept inflation and INCREASE wages to compensate for higher costs of living, or
B) increase production and thereby supply to reduce scarcity induced prices.
(possibly also C) be a member of a large free trade zone that makes importing cheaper but that ship has sailed for now)
Wouldn't increasing wages improve production by decreasing turnover?
Depends.
IF only some companies increase wages then they can probably reduce turnover. Though that might cause more turnover in other companies that don't increase wages.
If wages rise through the board and the better paying companies before remain the better paying companies after then that probably has little effect.
I suppose higher overall wages could reduce the pressure to look for a better paying job because your current one doesn't cover costs of living.