The Australia Institute poured a bucket on the notion that we all have to be wary about some illusory wage/price spiral.
It isn't wages which are causing price rises, its profits.
A couple of choice quotes:
Quotes were in a Guardian article: https://www.theguardian.com/busines...-company-profits-and-not-wages-analysis-finds
Raising interest rates is not going to stop the profiteering.
The biggest issue is that neither major party is actually willing to use fiscal policy to do anything about inflation. They are happy for the Reserve Bank to keep raising interest rates, which will basically benefit the banks, to restrict demand when there are alternatives. Keynes suggested compulsory saving so you get the funds back when the economy is tanking, which would benefit wage earners and reduce demand. Other alternatives include higher taxes on those who are not impacted by higher interest rates, and there are more policies which could be tried.
DS
It isn't wages which are causing price rises, its profits.
A couple of choice quotes:
“We’ve been told a story that workers need to restrict wage growth and accept a permanent reduction in living standards in order to fix inflation,” he said.
“This evidence shows that’s an economic fairytale.
“ABS data shows that without excess price hikes through the pandemic, inflation would likely be within the RBA target band, and hence there would be no need for the nine extreme, back-to-back interest rate rises that are crushing households and mortgage holders, fuelling the cost of living crisis.”
Quotes were in a Guardian article: https://www.theguardian.com/busines...-company-profits-and-not-wages-analysis-finds
Raising interest rates is not going to stop the profiteering.
The biggest issue is that neither major party is actually willing to use fiscal policy to do anything about inflation. They are happy for the Reserve Bank to keep raising interest rates, which will basically benefit the banks, to restrict demand when there are alternatives. Keynes suggested compulsory saving so you get the funds back when the economy is tanking, which would benefit wage earners and reduce demand. Other alternatives include higher taxes on those who are not impacted by higher interest rates, and there are more policies which could be tried.
DS