Employees frustrated by inflation

Employees frustrated by inflation – Korea Times

Employees frustrated by inflation

Bank of England
Bank of England

By Lee Kyung-min

Inflation is no longer a term used only by researchers to describe the economy, as exemplified by salaried workers clearly experiencing soaring prices of almost all frequently purchased goods and services as well as the costs of borrowing then that their monthly salary is growing slowly.The supply shock linked to the scarcity caused by the COVID-19 pandemic has led to sustained increases in the prices of consumer goods, with the prospect of further increases very likely due to the surge in commodity prices, especially world oil and commodity prices.

This further reduces the purchasing power of Korean wage earners, whose wages are not rising fast enough to match the double-digit increases in food and agricultural prices in recent months.

Experts say inflation will continue into next year and beyond, supported by supply bottlenecks and a recovery in the global economy and partial growth in consumer confidence which The result is, but the overall reduction in purchasing power will reduce the country’s gross domestic product (GDP) closely linked to household income.

The price of a 30-egg packet is 6,401 won ($ 5.4) this month, up 14.6% from a year ago. The franchise chicken brands increased the price from around 2,000 won per pack to 20,000 won. The price of sodas will be increased by 5%.

Automobiles will experience a price increase of between 5 and 7%, due to the increase in the prices of raw materials. Supply disruptions in the semiconductor industry also contribute to the unit price.

Energy prices are also expected to soar, as reported by the Ministry of Trade, Industry and Energy which is discussing about a 10% increase in the cost of energy for one use. private, which they say is an inevitable measure to avoid losses.

It remains to be seen whether the Ministry of the Economy and Finance will actively intervene in the markets linked to controlling the vital part of the main costs of living. The volatile public mood ahead of next year’s presidential election is also putting pressure on the finance ministry.

But even if the ministry freezes tariffs for this year and early next year, the price hike will not be avoided but simply postponed to the next administration, as world oil prices are expected to hover above $ 80 a year. barrel.

Workers in Europe are demanding an increase of at least 5% to offset continued inflationary pressure in recent years in the wake of pandemic lockdowns. A worker group joined by 20 percent of European Central Bank workers is calling for the 5 percent increase, outright rejecting the central bank’s plan to go all the way to 1.3 percent.

“Rising inflation will certainly put a damper on business performance, and higher prices will in turn be felt by consumers in the form of higher price tags. The demands for wage increases in this context can be a vicious cycle that erodes economic vitality, ”Seoul said. National University economist Lee In-ho.

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