Petah?

[u/Melodic_Judge_129]

[u/a1b2t]

today you earn $1000, next year you take a pay cut to $950 = 5% deflation

[u/thevoidthatjerksback → u/a1b2t]

What? No I already get a paycut with inflation. Deflation is where I get a pay increase.

[u/a1b2t → u/thevoidthatjerksback]

And why does it increase?

[u/weed0monkey → u/a1b2t]

Because your purchasing power is now higher

[u/CheshireTsunami → u/weed0monkey]

Assuming you aren’t part of the layoffs and wave of underemployment that follows. The same way firms increase prices to keep them consistent with inflation? They do the same thing in reverse for deflation and wages

[u/thevoidthatjerksback → u/CheshireTsunami]

They can only leverage those threats so far in the face of deflation. They can leverage those same tools infinitely in the face of inflation

[u/DisposableSaviour → u/CheshireTsunami]

That’s an assumption, not a fact. People are irresponsible with money, and deflation won’t change that.

[u/CheshireTsunami → u/DisposableSaviour]

Actually; supply and demand is an economic reality. As it becomes less profitable to hire people at a certain wage, firms will lower those wages to retain profitability.

If you want to work on the assumption that firms are going to behave contrary to how they have in every other case (including periods of deflation) you can, but let’s be clear. Your assumption is also just that, and moreover- it’s a mountain, uncited and difficult to support. My assumption is, meanwhile, backed up by decades (if not centuries) of empirical evidence and a very simple assumption to support (Firms will act as they do, responding to supply and demand)

Going after assumptions is a bad argument for you dude. You have way more than I do.

[u/DisposableSaviour → u/CheshireTsunami]

I didn’t say any that supply and demand. I meant that people suddenly becoming financially responsible because of deflation was an assumption.

[u/CheshireTsunami → u/DisposableSaviour]

Well that’s not what I’m saying, so skill issue