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That would only be the case if this one business were the entire economy of California. The added demand caused by employees with more money to spend will gener

• twoodfin 10y ago
  If you're sure about this, what's the point at which raising the minimum wage would be a net loss for aggregate demand?
  • youdontknowtho 10y ago
    I'm not an economist, so consider me soundly put in my place.
  • cmdrfred 10y ago
    Probably around the natural wage floor that is artificially low due to government subsidies (food stamps, housing assistance, welfare, Medicaid, etc). The unsubsidised wage floor is likely around the cost of living (In California that number is or will be above 15 an hour by the time the law is in place). A minimum wage increase isn't a gift to workers as much as it is a demand that the taxpayer no longer subsidize these businesses.
    • twoodfin 10y ago
      That argument still doesn't seem coherent me. What "subsidy" is Walmart receiving that the Costco across the street is not? Walmart, after all, is paying workers who otherwise would receive even more government benefits. Costco is paying those same workers $0.
      • cmdrfred 10y ago
        I'm not sure what your question is. Costco runs smaller margins than Walmart due to the founders religious ideology that prohibits him from operating like Walmart. Walmart is by far a more profitable model (121 billion gross for Walmart compared to 15 for Costco). The wages paid by Walmart are below the cost of living, if they simply paid them without subsidy their employees would be often unfed and homeless. >Costco is paying those same workers $0. Why would Costco pay its competitors employees? (Beyond what is does already via taxes)