Could salaries increase inflation?

The problem with inflation is that the rise of the salaries is increasing the rise of the prices. Sometimes the labor union has mentioned as the thing that increases inflation. The reason for that is it wants to rise the lowest salaries. The problem is not in the rising the lowest salaries. The problem is when the lowest salaries are rising that thing causes the situation. That for some unknown reasons also all other salaries must raise when the cleaner's salaries are rising.    

This kind of effect is a remarkable thing in work marketing. When the lowest salaries are rising, all other salaries must also rise. And that thing causes that the prices are also rising. The question is why only the lowest salaries cannot be rise and others would remain at the same level? And the interesting thing is this. When some cleaner would get 3-4% rise in the salaries all other actors must get the same money. 

That is an interesting thing. If all salaries rise 3-4%, that thing causes that the markets would transfer that thing at the prices of products. So that thing means that the rise of the payments would transfer, straight to the prices of products. And the thing is that this kind of rise in salaries doesn't have an effect. When the prices will rise the same way with salaries. 

It means the real increase of the purchasing power is zero. And if there is the increasing the taxes. That thing can mean that the rise of salary would turn to negative purchase power. So when we are looking at the things that are discussed in the financial discussions between employers and labor unions we should look at entirety. 

The retail actors are transferring the rising salary paychecks to the prices of products. And of course, raising taxes must notice. When we are calculating the effect of raising salaries on the purchasing power. The purchasing power means how much goods the actor can buy. Many things are affecting that thing. One is the value of the purchase, and the second is the level of the prices. 

When society is split

When society is split

In the 1990s the differences of incomings were growing, and that caused the advantages what has caused many problems in Western society. The social and economic advantage caused that rich person became richer and poor people stay poor. But this thing doesn't tell everything about the economics of the country, and the thing what is always forgot is that inflation causes the prices of the merchandise are raising, and even if the incoming level has been same, the person can get less merchandise with the same money, what they got in the early 1990s. This means that the purchasing power of money has been decreasing, and the thing is that money is not the same thing anymore.

But when we are thinking about this thing, what is called as "lowball glass effect" we have forgotten one very important detail. If we are thinking the economics as the pyramid of the glasses, and when we are putting the liquid on the top of the pyramid the most of it would fill the glasses, which are top of the structure. That means that the most highly paid jobs are also slipping in the hands of the wealthy people. When the highest bosses of the companies are adjusting their salaries and commissions.

Which causes the effect, where the people, who are leading companies are getting most of the profit if the year of the company has been victorious. That means the most of the incomes might go to the salaries of the directors and members of the board of directors. This means that regular work doesn't get anything about this kind of results. All profit of the company would go to the pockets of the highest rank directors, and in the worst cases, the social space of the company would get a coffee maker, when the directors would get new cars.

The problem of this advantage is that when the differences between incomings are growing that thing will misplace the middle class from society. The length of the accordion of salaries causes the effect, that when researchers are calculating average salaries, the real average salaries doesn't match with calculations. And that thing causes problems with politicians because the calculated middle-class people are not the majority anymore.

The reality is far away from theory, and this is notable in politics. This causes problems to adjust the taxes and this causes the loss of popularity. This is one thing, what is remarkable in business life. The thing what causes that effect is that the wealthy people are almost every time in the high-rank jobs, and that means they have a network of other high-rank people around them.

This means that the top positions in companies are going to people, who the electors are already known. And that's why the people who have parents, who have big salary are getting most highly paid jobs in the business. This is one part of business life. That kind of advantage would cause that wealthy people are moving away from downtown, and this thing isolates them more than ever before.

The political culture and use of power

The political culture and use of power

The thing is that democracy is a good way to rule the country if the decisions, what government makes are pleasing me, is a good way to think about things. This is the thing, what we must remember when we are talking about the way to rule the nation. If every people in the country supports the leaders, in every state, would have democracy. But why western democracies are supporting dictators?

This is a good question, and the thing is that dictatorial government are a good way to turn attention away from internal politics. If somebody goes worse than in our country, why people should complain? And if people would get too much salary, that thing means, that the production must transfer to some far-east countries, which are also suitable enemies for the western world, because they are far away from us.

Who cares about the conditions, where those people live, because of their national firewall denies the information, what comes from that country. And there are tales that western companies have delivered the firewall technology to those governments for denying the delivering the unpleasing information of the human rights in those countries. What people can't see does not exist is the idea of censorship. And that's why the benefit of some companies might be that people cannot see where those products or their materials are made.

Sooner or later every person in the world must tell the opinions about things like democracy and ruling the nation. This is the thing in every sector of life. Economic leaders must say, do they want to support the political systems, what are against the benefit of the nation and ordinary people.

When we are thinking about the reason, what many rulers have used when they are "forgotten" the next elections is that they are making their nation great. But then somebody would ask, what is the definition for the nation? If normal people are living below the limit of the poor, we must realize that there is something wrong with that state. When we are talking about the regular or average salaries of the state, we must realize that there are two ways to calculate those things.

One is that every salary type in the state would list in the line and that brings the average salary, what is a little bit different than the real economic situation in that nation. This way to make statistics is very impressive, but it is forgotten one thing, and that is how many people would get each class of salary. The thing is that the ruling class, which represents only a couple of percent of citizens can get billions of dollars, and the rest of the people are eating their shoes.

This is a provocative example of the thing, what is called as the growing difference between the incomes. But many times the GNP is mentioned the good method to tell the world, how wealthy the nation or its economy is. That thing tells about how much each nation would earn, and that thing is a really interesting number. When we are thinking about GNP that tells only how much the nation earns per citizen. But it would not tell who will get most of the money, and it would not tell, how much each nation pays to other countries.

This means that most of the national income might come from foreign companies and investors, which seems a very good thing. But then that nation can buy foreign military material and most of the income might go back to foreign hands.

Or otherwise, those states could sell their waterworks to foreign investors and then return all their money to foreign countries. Otherwise, GNP is not telling, who exactly is earning the money of some nations, and that means that the distribution of the incomings is not seen in the statistics, what is always telling about GNP. Another way to tell people is that the economic situation in the state is good is telling, how much or rather a way to say, what is the percent of unemployed people.

That thing is a very good meter about the competitiveness of the companies, which operates in some nation. But the thing, what is missing from those statistics is how many people are in pension, and the thing what would be nice to see is, has that country the way to handle unemployment just to put them in the pension or to works, where they don't get salaries? That thing is a really good way to make statistics looking good. If a person would not get a job, would that inmate send to some"institute" for retraining, and that's a good answer for many problems.

Bad economic situations somehow justify that companies are telling that they must decrease salaries, but the high percentage of unemployed people means that companies have the freedom to select workers freely because there are more offenders for jobs. And that will be a good way to keep people silent, because if somebody talks against the employer, would that mean, that the job of that person would be seen more careful than before.

If we are thinking about the one-party governments, the best thing, what those governments can hope is that people are making 12 hours working days. Too much free time makes possible to agitate against the government and it's a way to rule the nation, and also the long working day will keep people out from social media. That allows companies to deny the delivering information, which is not meant to tell for great public. The thing is that democracy is a good way to rule the country if the decisions, what government makes are pleasing me, is a good way to think about things, as I wrote at the beginning of this text.