r/PeterExplainsTheJoke 9h ago

Meme needing explanation Petah?

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u/thevoidthatjerksback 8h ago

I doubt that anyone could explain this in a way where I would accept deflation as worse

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u/a1b2t 8h ago

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

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u/thevoidthatjerksback 8h ago

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

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u/fun-dan 4h ago

You will get a literal paycut when deflation happens. Because falling costs include costs of labor. Stuff will cost less, but you will also earn less, so you won't get any benefit out of it.

In that sense, deflation is only "benefitial" to those rich enough to live off their wealth

You also don't get much benefit with inflation because either your paycheck rises with inflation, or it stagnates. But deflation has other consequences that are much much worse.