Wage fallacy on inflation

THE EDITOR: People continue to make the argument that salary increases for workers would lead to inflation without the slightest shred of evidence to support their position. In fact, they don’t even bother to advance any argument in support —they simply make the assertion, and it is believed. It is believed because of the perceived status of the persons making the claim - businessmen, economists and university lecturers. One cannot help but wonder how opinion leaders in society can make such statements. Has any study or research been done to support this thesis? If so, where are the results of such study and why are they not being provided for public consumption? Why is the result of such research being kept secret?

The reason is because such economic theory is the discredited spin-off of the heady days of the seventies and eighties. It has been resurrected by the proponents of the capitalist rhetoric of the free trade agenda. In fact, inflation occurs independent of salary increases and is more influenced by demand than anything else. The inflation occurring in the present situation has little to do with any wage increases; it has more to do with factors external to the Trinidad market over which businessmen claim to have no control. The public’s mind must be disabused of the misconception that the increases negotiated by Atlantic LNG construction workers has anything to do with increases in the price of chicken, flour, oil, bread, cement, steel or anything else - the inflation started long before Atlantic LNG!

KARAN MAHABIRsINGH Carapichaima