link to original reddit post by /u/FerociouslyNaked
It amazes me to no end that our government is so incredibly dysfunctional that it has one part of it, the Congress, trying to raise workers' wages via the minimum wage, while at the same exact time it has another part of it, the Federal Reserve, which is deliberately reducing the purchasing power of workers' wages via inflation.
The Federal Reserve controls the inflation rate. And it just so happens that 2% yearly inflation is based on a guess at how to run the economy. There is no "proof" that inflation is good for the economy, except for asset holders who plan to sell those assets for cash later on.
The eggheads at the Federal Reserve believe that inflation creates jobs by reducing the real cost of wages over time, thus allowing businesses to hire more workers because they are cheaper. In other words, the Federal Reserve literally believes that they are "helping" American workers by making them poorer, on purpose.
They do this even though nearly half of Congress wants to directly counteract this effect by raising the minimum wage! In other words, two parts of the government are fighting each other, distorting the American economy in the process, and drastically hurting people who save primarily in cash (eg THE POOR).
If Congress wants to make workers richer, all they have to do is tell the Federal Reserve to stop creating so much inflation.
The Fed could easily target 0% inflation instead of 2%.
Workers wouldn't be getting poorer over time by default if the Fed would just stop inflating the money supply. The value of $7.25 today would still be the same as it was 100 years ago, if the Federal Reserve hadn't been inflating our currency all this time.