2023-06-01 04:05:00
Your salary increase is not responsible for the rise in inflation and never has been, insists the Institute for Socioeconomic Research and Information (IRIS) in a note published Thursday.
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“The best strategy to fight inflation is to increase wages,” summarizes Eve-Lyne Couturier, researcher at IRIS.
The study was produced to destroy the idea that the higher wages go, the worse inflation will be. What economists call the wage-inflation spiral.
If a pound of butter now costs $8, we can be certain of one thing: its price will not drop.
“Yes, inflation has been slowing for a few months, but prices remain high and above all, they will remain so,” adds the researcher.
In short, we do not protect the population from the effects of inflation with one-off checks once in a while.
The only thing you can do to offset inflation, she says, is to offset income.
But “governments do not seem to have at heart to protect purchasing power”, because “the political class does not act on the consequences of inflation”.
In their note, the IRIS researchers show, with supporting studies, that during the last inflationary periods, wage increases contributed very little to the inflation rate.
Unfortunately, according to Ms. Couturier and her colleagues, the Bank of Canada and the governments of 2023 are more interested in protecting corporate profits than the purchasing power of the population.
For IRIS, it is a question of adopting a strategy which will have no significant effect in the medium to long term on the level of inflation and which will enable the population to meet its needs.
“If we increased salaries by 30% as the deputies did, it would be another reality, because it is much more than inflation. We only show that an increase in wages equivalent to inflation does not contribute to inflation”, indicates the researcher.
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