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That's a nice story, but it's just that. Alternatively, all the minimum wage workers will have more expendable income. Some of that may be spent at those brick-

That's a nice story, but it's just that. Alternatively, all the minimum wage workers will have more expendable income. Some of that may be spent at those brick-and-mortar shops, and will offset the additional costs. Remember that the velocity of money makes it a non-zero-sum game. EDIT: Ends up that Wikipedia covers this nicely: https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States#Economic_effects https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta... "The interconnection of price levels, central bank policy, wage agreements, and total aggregate demand creates a situation in which conclusions drawn from macroeconomic analysis are highly influenced by the underlying assumptions of the interpreter." Also has a nice side-bar quote from Henry Ford, who was partially known for higher wages, and which I think addresses the point I was trying to make (emphasis mine): "The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One's own employees ought to be one's own best customers."

WillPostForFood 8y ago
Or they spend their extra money at Amazon because prices are lower. Or you are right and it helps brick and mortar in the handful of cities with Amazon warehouses, but hurts everywhere else. Worst case for Amazon is they maintain status quo by forcing competitors cost up. Best case for Amazon is that they drive some of their competition out of business, or take some of that business because super giant Amazon is better able to absorb the increased wage cost than smaller businesses. It is very much like their state sales tax collection strategy. Oppose it for as long as possible, accept it, then lobby for everyone else to have to do it.
- jdmichal 8y ago
  The thing is, this is a bit circular. How can Amazon pay more than others, but it hurts them less? Because they have some kind of competitive advantage, no? That advantage is going to manifest somewhere. Saying that they are going to get a competitive advantage by raising wages, which they could only do because they had a competitive advantage... Doesn't really go anywhere. This just happens to be the chosen manifestation of their advantage, and honestly higher wages are probably one of the more socially-positive manifestations.
wjnc 8y ago
It's not really a story is it? Output is a function of capital, labour and productivity. Double cost of labour and those that get the most productivity out of capital gain competitiveness. Who is relatively capital intensive? Amazon. So it's a pretty factual story economics-wize. There's no doubt labour is better of in the short run with double wages. I would not doubt the effects in the long-run but that's part belief. The market structure will change, less capital intensive firms will drop out. That might be brick and mortar stores (note: bricks are capital but bricks are not really productive in the sense meant above).

WillPostForFood 8y ago

Or they spend their extra money at Amazon because prices are lower. Or you are right and it helps brick and mortar in the handful of cities with Amazon warehouses, but hurts everywhere else. Worst case for Amazon is they maintain status quo by forcing competitors cost up. Best case for Amazon is that they drive some of their competition out of business, or take some of that business because super giant Amazon is better able to absorb the increased wage cost than smaller businesses. It is very much like their state sales tax collection strategy. Oppose it for as long as possible, accept it, then lobby for everyone else to have to do it.

jdmichal 8y ago
The thing is, this is a bit circular. How can Amazon pay more than others, but it hurts them less? Because they have some kind of competitive advantage, no? That advantage is going to manifest somewhere. Saying that they are going to get a competitive advantage by raising wages, which they could only do because they had a competitive advantage... Doesn't really go anywhere. This just happens to be the chosen manifestation of their advantage, and honestly higher wages are probably one of the more socially-positive manifestations.

wjnc 8y ago

It's not really a story is it? Output is a function of capital, labour and productivity. Double cost of labour and those that get the most productivity out of capital gain competitiveness. Who is relatively capital intensive? Amazon. So it's a pretty factual story economics-wize. There's no doubt labour is better of in the short run with double wages. I would not doubt the effects in the long-run but that's part belief. The market structure will change, less capital intensive firms will drop out. That might be brick and mortar stores (note: bricks are capital but bricks are not really productive in the sense meant above).