Wage adjustment according to inflation may help to improve social equality

I think if employers are made to adjust their employees’ wages according to inflation annually, it will be helpful to improve the social equality. This thought has several reasons.

Firstly, the majority of the population (excluding those who have not finished their education or have retired), especially in developed or developing countries, are employed by others. When their incomes can be adjusted according to inflation, if they stay with the same jobs, their lives will not be affected by inflation. Secondly, it also adds more inflationary pressure in the economy, which could encourage more consumption. When there is more consumption, it can create more jobs, so the unemployment rate could be reduced. Thirdly, the proportions of ordinary people’s wealth that are used for consumption are higher than the proportions of super wealthy people’s wealth that are used for consumption, this implies when ordinary people are given more wealth, it will increase consumption more effectively and wealth is more likely to move across different classes of people. Fourthly, as employees’ wealth is dependent of their incomes, when their incomes change according to inflation, they will be benefited from this policy, this may help to close the wealth gap between the ordinary people and the super wealthy people. Fifthly, the super wealthy people’s wealth may be diluted by high inflation in the economy, this also forces them to spend more, so the wealth from the top wealthy class will be distributed to other classes among the society.

Therefore, if employees’ incomes can be lifted according to inflation, it can contribute more to the economy and further close the wealth gap between the top wealthy class and the ordinary people.