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by philipallstar 36 days ago
> That's the difficulty with automation making other sectors more efficient, wages get driven up while your productivity stays the same.

The root cause of that is minimum wage - if you raise it then automation becomes important, and where you can't automate it drives up prices of essential goods. So a doorman is either automated away or needs a raise to afford to live.

1 comments

It's not just minimum wages. If productive sector employees' demand for goods causes inflation, prices will rise. If you want to keep your nurses/doormen/teachers you'll have to increase their wages regardless of what the minimum wage is.
> If productive sector employees' demand for goods causes inflation, prices will rise.

I'm not sure what you mean. Prices rising is what we call 'inflation' - one doesn't cause the other. They're the same thing.

Rising demand induces inflation because more money is chasing the same goods.
That might just mean more competition is created as there's a bigger market to chase. Minimum wage has the same risk as the one you mentioned, but also all but guarantees higher prices (particularly on labour-intensive goods such as food) as everyone's wage needs to go up to make the harder/worse jobs worth doing.