Demand Quote by Richard M. Nixon
“Sharp increases in the minimum wage rate are also inflationary. Frequently workers paid more than the minimum gauge their wages relative to it. This is especially true of those workers who are paid by the hour. An increase in the minimum therefore increases their demands for higher wages in order to maintain their place in the structure of wages. And when the increase is as sharp as it is in H.R. 7935, the result is sure to be a fresh surge of inflation. Once again, prudence dictates a more gradual increase in the wage rate, so that the economy can more easily absorb the impact.”
About This Quote
Source Speech: Remarks on Minimum Wage, United States, 1971
Sharp wage hikes can trigger inflation as workers demand higher pay to keep relative wages stable.
In simple terms: Large wage hikes may cause inflation.
Key Takeaway
Increase wages gradually to avoid inflation.
Themes
economics
inflation
labor markets
policy
government
Mood
cautious
analytical
concerned
Type
policy
economic
advisory
When to use this quote
- legislative debates
- business budgeting
- personal finance planning
Key Concepts
price stability
wage dynamics
inflationary pressure
Questions to Reflect On
- How can policymakers balance living‑wage goals with price stability?
- What safeguards can prevent wage‑price spirals?
A Different Perspective
Rapid increases may hurt low‑income workers if not matched by productivity growth.
