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I would like to know if the higher minimum wage resulted in higher prices for the end consumer. Has anyone in Seattle noticed this? I don't see how they couldn

I would like to know if the higher minimum wage resulted in higher prices for the end consumer. Has anyone in Seattle noticed this? I don't see how they couldn't. It seems to me raising minimum wage is just pouring gasoline on the inflation fire.

wbl 8y ago
Inflation that has missed targets negatively for a decade. NGDP targeting would say ease!
- malvosenior 8y ago
  Only if you don't count housing, healthcare and education.
  - danmaz74 8y ago
    Inflation does count all those sectors. Which, by the way, would mostly be untouched by changes in minimum wages.
  - grigjd3 8y ago
    The minimum wage doesn't drive costs in housing, healthcare, and education.
    - malvosenior 8y ago
      How can it not drive up housing? Wouldn't the extra money these employees now make get sucked up into rent?
      - grigjd3 8y ago
        The cost of housing is driven 100% by demand.
- eru 8y ago
  Depends on what target you want to set. (Mostly, the exact target doesn't matter, as long as you meet it.) NGDP levels in America have mostly been on a straight line since 2009 or so. (But they had a big change in trend compared to before.) Still, that doesn't answer anything about the effects of minimum wage. An NGDP target would still make minimum wage laws a bad idea. But since NGDP evolution is fixed, you'd see an RGDP decrease and hence an inflation hike. The American sort-of Fed fixes inflation instead. If you are into this kind of thing, do read George Selgin's Less Than Zero. (Eg at https://iea.org.uk/publications/research/less-zero https://iea.org.uk/publications/research/less-zero). It gave me an appreciation of the classic gold standard---and how it managed to keep NGDP stable under the right regulatory circumstances, that I was missing before.
- conanbatt 8y ago
  National inflation is not the same as increase of local costs.
oasisbob 8y ago
Yes, there are some places where price increases are clearly visible - franchise fast food is a big one. Otherwise, cost of living in the region was already increasing. I've been in Seattle for the last six years and can't really recall many other dramatic price increases.

wbl 8y ago

Inflation that has missed targets negatively for a decade. NGDP targeting would say ease!

malvosenior 8y ago
Only if you don't count housing, healthcare and education.
- danmaz74 8y ago
  Inflation does count all those sectors. Which, by the way, would mostly be untouched by changes in minimum wages.
- grigjd3 8y ago
  The minimum wage doesn't drive costs in housing, healthcare, and education.
  - malvosenior 8y ago
    How can it not drive up housing? Wouldn't the extra money these employees now make get sucked up into rent?
    - grigjd3 8y ago
      The cost of housing is driven 100% by demand.
eru 8y ago
Depends on what target you want to set. (Mostly, the exact target doesn't matter, as long as you meet it.) NGDP levels in America have mostly been on a straight line since 2009 or so. (But they had a big change in trend compared to before.) Still, that doesn't answer anything about the effects of minimum wage. An NGDP target would still make minimum wage laws a bad idea. But since NGDP evolution is fixed, you'd see an RGDP decrease and hence an inflation hike. The American sort-of Fed fixes inflation instead. If you are into this kind of thing, do read George Selgin's Less Than Zero. (Eg at https://iea.org.uk/publications/research/less-zero https://iea.org.uk/publications/research/less-zero). It gave me an appreciation of the classic gold standard---and how it managed to keep NGDP stable under the right regulatory circumstances, that I was missing before.
conanbatt 8y ago
National inflation is not the same as increase of local costs.

oasisbob 8y ago

Yes, there are some places where price increases are clearly visible - franchise fast food is a big one. Otherwise, cost of living in the region was already increasing. I've been in Seattle for the last six years and can't really recall many other dramatic price increases.