In the last week, Putin became a one-man wage-price spiral and held the world’s food supply to ransom

Putin just became a one-man wage-price spiral while holding the world's food supply to ransom

May 26, 2022 by Fortune

Key Facts

  • Russia’s inflation problem is getting out of hand, and the world’s food supply problem is also worsening, as the war in Ukraine rumbles on for a third month.
  • “In countries that aren't conducting any operations—say, overseas in North America, in Europe—inflation is comparable and, if you look at the structure of their economies, even more than ours,” Putin said, failing to mention that the war in Ukraine has been a big driver of inflation in the West.
  • This is known as a wage-price spiral, wherein workers’ higher wages lead to companies increasing prices across the board for their goods and services, which can in turn push more workers to ask for higher wages to accommodate the higher costs of living.
  • Annual food prices globally are up nearly 30%, according to the UN, and a large reason behind this is the ongoing blockade of Ukraine’s ports by Russian forces, which has left nearly 25 million tons of essential grains stranded.

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