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Wow, what a post!
If we lived in a world without inflation then that might be a very valid argument however we don't.
In that world we would all be paid one groat for the work we do and we could happily buy all our stuff.
The majority of people are paid to do a job and with realistic targets will achieve their expectations. If they don't get a pay rise inline with inflation then that workforce will become progressively poorer as inflation continues to rise even at small percentages.
A smaller proportion may well exceed their expectations, but who is to say that they were again realistic, I have seen some shocking expectations that have either far too easy or at the opposite end impossible to achieve. Those people exceeding may warrant a merit rise plus an inflationary rise. However the next year do you then set harder expectations, as you shouldn't be able to continually exceed expectations, this leads to the question of promotion etc which again have harder expectations.
Example for arguments sake, person have to treat 20 patients a day, that person then treats 30 patients do they exceed their expectations so they get their pay rise, probably, but the fact people are now not getting rushed treatments means that the chance of them coming back is higher.
On the flip side those people not meeting their expectations get no additional pay.
We are in a never ending circle....
As the economy increases it drives inflation including wage inflation, which in turn drives an increase in tax receipts which can be used to fund the additional salaries of those paid by the government.
There are a lot of levers you can pull and tweak that will have impact on the economy.
The problem is that at the moment there appears not to be enough in the pot after paying for all the interest and debt repayments so something has to give. |
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