Imagine a wonderful situation, the government decided to increase wages in the country to the European level! Do you think it is impossible to do? It’s easy!
We have a couple of mints and a controller in the form of the Central Bank and the population, much of which derives income from the budget. Give the command to increase the salaries of teachers, doctors, officials, internal troops, the army, employees tax and other services, fire protection, and all who feed from the budget.
Give the command to make the money supply mints, and banks in electronic form. And voila, a miracle happened, income has increased 10 times. Strictly speaking there are no obstacles and difficulties. If today is to give these three teams, then next month our teacher would get paid 180 thousand rubles, and the cleaning lady in the administration 120.
They all go to the store and increase the income of entrepreneurs and wages are rising among workers of the entrepreneur, and so the chain grows, the salary at all.
Nothing complicated! )))) There is only one small problem, a month later, prices in our stores will increase by exactly the same amount, ie 10 times. Why is this happening, why is that? And this is due to the fact that the number of products is directly correlated with the amount of money in the economy. Why in Europe salaries are higher and prices are the same as we have in the store? Pork costs 200 rubles, and a washing machine the same 20 thousand?
And because to increase your wages to the European level should first increase the production of goods to the same state. This is called GDP. That is the most notorious domestic product, which we produced. And there is nothing can be done until we will not be able to produce 10 times more pork and washing machines, and our salary will be like it is and do nothing in the long run impossible.
Income it does not depend on the level of wages, and depends on the excess mass of commodities. Therefore, all staring at GDP growth, because this depends on your income. The more you produce goods and services the higher your standard of living. And when GDP grows, grows the standard of living, and when there is recession and the downturn in the economy, it means that your life is gradually falling and you will live worse and worse.
As one famous blogger:- “We are going to Moscow to work in factories for 12 hours, and to find a normal job with a good salary,” that is, to do stuff not related to the production of goods, and these goods are good to consume! Right, if everyone did think the salary will be even less!
The conclusion is simple, to better live need to work better, to produce more goods and services and consume them we can do more. And the government is not dependent on the salary it can not affect a penny, and the prices in the stores. The government has no authority to set prices for a product that belongs to a private business. These prices can only affect ourselves with their work. That’s all!
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