Why Inflation is a Result of Our Politicians Failure to Compromise

Every other news article is about inflation. And depending where you get your news or which political party you're associated with, you're going to get a different explanation...and as usual someone else is to blame. The truth is both sides are to blame, but I'll explain that later.

Simply put inflation occurs each time business owners are forced to pay more for the goods and services required to deliver the consumer an end product. Notice I put in bold and underlined "each time". The reason, inflation can be a vicious cycle and our politicians decisions can create a death spiral of consequences.

As the pandemic comes to an end, there was one consequence that we should have all seen coming. Gas prices were going to rise. We went from a large portion of our Country staying home and watching Netflix, to a population with new found freedom and cash in their pockets. Simply put many of us were ready to get back to work and travel. We went from empty roads to traffic jams. Economics 101, increase demand without increasing your supply will result in higher gas prices.

So now the cost of getting the goods and services to the consumer has increased, therefore we should see a moderate degree of inflation. Unfortunately, politicians on the left will argue that the cost of living has increased so now we need to increase minimum wage to $15 an hour. They will correctly point out that minimum wage workers can't afford to live in the majority of our cities based upon the cost of living. Our politicians on the right will argue that Biden paid labor to stay home (even though this practice started under Trump), and the labor shortages are killing their businesses. The Right is also correct, when they say forcing businesses to pay labor $15 an hour or more will result in higher prices being passed onto the consumer.

There's an obvious compromise that I believe both sides have missed or ignored. I agree that full time employees should earn $15.00 an hour or more. However, part time employees should not be guaranteed $15.00 an hour. Businesses should not be forced to pay untrained and often uneducated workers $15.00 an hour. Part-time employees should be incentivized to work hard and move up in a company so they can earn higher full time wages.

Talking with other business owners, they all have the same complaint. Many of their employees lack the traditional work ethic that we had several year's ago. How did we develop that work ethic? Simply put, for most of us, we hated our part time job. It was either the work conditions, the shifts we were given, but mostly, it was the low wages. We knew that we had to work hard to move up in our organization. Once an employee demonstrates that he or she is a valuable member of the team, and the Company commits to full time employment, then the Government should step in and protect the employee and make sure they are earning a living wage.

I'm not sure I'll see this type of compromise in our life time. Each party raises more money in the conflict rather than the solution. It should have been obvious to everyone that this Country should make an investment in infrastructure. The bill should have been passed during the pandemic when Trump was President. When it finally passed the Senate, the Democrats held it hostage for months. Now the Republicans are vilifying other Republicans who voted for the Bill. You might ask, how does this affect inflation? The improvement of our infrastructure will result in less congestion on our highways and more electric vehicles, thus a reduction in the demand for gasoline (lower prices). Bottom line, the longer we reward our politicians for the fight rather than the compromise, the more damage we will do to our Country.