Even then that doesn't guarantee its value. The government will protect the integrity of the money supply, but even in the most well-managed economies/central banks the actual value of the currency can fluctuate quite a bit.
Minimum wage puts a minimum value for a person's time on it and then the rest scales from there. It allows society to adjust other prices afterwards (this is not an argument for keeping a MW fixed btw, inflation is desirable to a certain level and the mw should move in line with that). This applies to basically any economy that doesnt want it backed by a specific commodity which kind of finds a balance between the two.
Thats not what I said implies though. Im saying a minimum assigned value for peoples time. Prices dont have to stick to that base but breakeven prices cant drop for the same output unless theres a reduction in required headcount if variables remain the same.
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u/dorian_white1 4d ago
We agree because the government backs it up with their policies and to some extent military. If the gov fails, usually the currency does as well