It seems that is the position of Bank of Canada Governor, Tiff Macklem. That seems one of his justifications to increase interest rate to increase unemployment to fight inflation.
No wonder he got push back from union and NGO leaders.
Just one question first. Does wage increase keep pace with inflation now or ever? If not, then people’s buying power is in fact decreased. The inflation is around 10%. What is the wage increase rate then? I highly doubt that it is 10%.
However, I fully believed that many business executives would cite wage as one of the main reasons to increase the prices of their products besides energy, transportation, etc.
It seems that there is a class warfare going on here.
Some leaders are deemed as out of touch and lack of compassion. Actually, interest rate increase is a very blunt tool impacting many people broadly and non-discriminately. Many believe that the inflation is caused by supply chain disruption, slow economy in China due to its zero-covid policy, energy shortage caused by Ukraine war. Some say this is out
I can add one – big corporations gouging consumers due to lack of competition. At least this is what the government can do? Anti-trust regulation, break the big companies up? Tax on excessive profit like the windfall tax on oil and gas industry? So many the government can do regarding this.
Worthfy Financial Literacy Counselling 