Why is the cost of living going up when technology should allow humans to increase productivity while decreasing human workload?
In: Economics
Greed is one of the simplest ways that buying power is reduced. Company 452 decides they want more profits this year, so they raise prices. Other companies that buy from 452 are now forced to raise their prices to keep the same profit line. Competitors of 452 will probably raise prices as well, because, hey, it’s free money and everybody is doing it. Then the workers of 452 (who, incidentally, didn’t get a pay rise) try to buy things from other companies and find out their money is worth less, so they complain and maybe 452 (or, more likely, the government) instigates mandatory pay rises. These pay rises force 452 to raise prices a bit again, since they want those sweet sweet profits, which makes this whole thing a bit cyclic until all parties are happy enough to maintain the status quo, until some other company gets greedy.
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