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>Yeah, input costs have no effect on whether a business can operate at the margin They can but that's obviously a rather different question. >If we suddenly c

>Yeah, input costs have no effect on whether a business can operate at the margin They can but that's obviously a rather different question. >If we suddenly care about what the economic research says, you should do a search for papers that don't confirm your biases. I have. >How the fact that raising labour costs will reduce the demand for labour is controversial is beyond belief Why is it so hard to believe that demand for minimum waged labor is very inelastic?

navigatesol 7y ago
>They can but that's obviously a rather different question. How is this a "different question"? It's the question. If there are businesses that can be economically profitable paying $14/hour, but minimum wage rises to $15/hour, those businesses are no longer viable. We can argue about how many of those businesses there are, but it's merely a fact that they exist at the margin. If you've ever run a small business yourself, you'll understand how small changes in the cost of labour can be painful. I'm not talking about about McDonald's or Walmart here. Again, we have social programs in my country to alleviate these issues. And they work. >Why is it so hard to believe that demand for minimum waged labor is very inelastic? So businesses optimize for the number of people employed, regardless of prevailing wages? I don't buy that, sorry.
- pytester 7y ago
  >How is this a "different question"? Because most businesses make profits so it's perfectly possible to raise input prices without them closing. >We can argue about how many of those businesses there are That's what we were doing. The answer was "not a statistically significant amount". >If you've ever run a small business yourself, you'll understand how small changes in the cost of labour can be painful. I understand all too well the kind of caterwauling that happens when you do something that could threaten the profits of any business. >Again, we have social programs in my country to alleviate these issues. And a historically high % of profit to GDP, so maybe we can give some of those programs a break and take the money from a sector of the economy that is actually flush with cash. >So businesses optimize for the number of people employed, regardless of prevailing wages? Absolutely they do, yes!

navigatesol 7y ago

>They can but that's obviously a rather different question. How is this a "different question"? It's the question. If there are businesses that can be economically profitable paying $14/hour, but minimum wage rises to $15/hour, those businesses are no longer viable. We can argue about how many of those businesses there are, but it's merely a fact that they exist at the margin. If you've ever run a small business yourself, you'll understand how small changes in the cost of labour can be painful. I'm not talking about about McDonald's or Walmart here. Again, we have social programs in my country to alleviate these issues. And they work. >Why is it so hard to believe that demand for minimum waged labor is very inelastic? So businesses optimize for the number of people employed, regardless of prevailing wages? I don't buy that, sorry.

pytester 7y ago
>How is this a "different question"? Because most businesses make profits so it's perfectly possible to raise input prices without them closing. >We can argue about how many of those businesses there are That's what we were doing. The answer was "not a statistically significant amount". >If you've ever run a small business yourself, you'll understand how small changes in the cost of labour can be painful. I understand all too well the kind of caterwauling that happens when you do something that could threaten the profits of any business. >Again, we have social programs in my country to alleviate these issues. And a historically high % of profit to GDP, so maybe we can give some of those programs a break and take the money from a sector of the economy that is actually flush with cash. >So businesses optimize for the number of people employed, regardless of prevailing wages? Absolutely they do, yes!