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I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever dec

I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever decreases poverty, and has a good chance of increasing unemployment, and is a one-size-fits all ($15/hr in NY, is different than $15/hr in Alabama) ... but it isn't inflationary. You're not creating new money.

__blockcipher__ 6y ago
Agreed, the reason minimum wage is bad policy and unethical is that you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation.
- ClumsyPilot 6y ago
  The minimum wage probably just increases costs if some items to cover minimum wage of those currently underpaid. You could argue about it, but calling it unethical seems far-fetched.
- willcipriano 6y ago
  If you made a minimum wage that was significantly above the prevailing wage I'd expect to see inflation in a economy like the US. My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock. We might not call that inflation in the economy generally as after all stocks would "deflate" during that time but in terms of living day to day it would be. Another potential mechanism would be if unemployment went up high enough due to a minimum wage increase that productivity decreases so much that the same number to dollars are chasing the results of less workers. That said, with the exception of very rural areas the wage floor for most moderately skilled or unpleasant work is above $15 an hour already, so this will probably not have much of a impact on poverty or inflation.
  - macspoofing 6y ago
    >My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock. OK ... but if the money supply stays the same, then all you're doing is just shifting the demand curves from one set of products (stocks) to another (TVs?). Put anther way, some things will go up, and some things will go down because spending habits changed. This happens now. It's not inflation just because the price of roses goes up in February.
    - willcipriano 6y ago
      I agree it isn't inflation in the classic sense, I'm not sure of a great term for this effect. A thought experiment, if I printed up a dollar for each one in circulation then put them in a vault that shouldn't cause inflation even though the money supply has doubled, similarly if in a thousand years someone opens the vault and puts those dollars into circulation inflation happens even though the money supply has unchanged. My thesis is dollars that go between hedge fund to hedge fund are "in a vault" compared to dollars that are buying food at the local Walmart. If some of those hedge fund dollars ends up in the hands of a individual (say a minimum wage increase causes firms to halt buybacks and direct that money toward payroll) that would cause inflation of consumer goods as now we have more dollars chasing the same output.
  - anotherman554 6y ago
    This is an empirical question (if raising minimum wage effects inflation) so what you expect in terms of inflation doesn't really matter. This isn't a philosophy question where you can imagine the answer and get a best in class result. Since 2009 people on the Internet have been prophesizing about massive inflation and inflation has been extremely low. Maybe they will one day be right, but like the boy who cried wolf nobody should be listening to warnings about inflation from people on the internet, as a class they don't have any idea what they are talking about.
    - mjevans 6y ago
      Offhand, just from my own crummy bio memory of prices of things... I'd estimate about a 50% increase in food prices in about the last decade. I'd also estimate that the asking price of a house was completely out of whack even post the recession in 2008; it _never_ corrected in any of the west coast areas I live in. Still even that price has continued to go up due to inelastic supply and ever growing demand.
- machiaweliczny 6y ago
  Im from EU and I think that minimum wage is basically negotiation with employer on your behalf. Obviously the lowest earning people don't have resources to negotiate salary well. IMO it's probably better to define it on more granular lvl that federal. If someone earns less it should be considered gig not work and basically non even taxed.
- jayd16 6y ago
  >you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. B does not follow from A if demand is elastic. Minimum wage proponents assume enough labor demand is elastic.
- whateveracct 6y ago
  > But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation. Inflation is a boogeyman. I heard a friend of mine not wanting any sort of covid stimulus checks because it would make his and his family's savings depreciate.
  - kyuudou 6y ago
    Huh? Inflation is very real. The dollars I saved from 20 years ago buy a lot less across the consumer spectrum. Prices don't go up, the money's purchasing power goes down. That is not a "boogeyman", it's theft by the inflation tax.
    - whateveracct 6y ago
      yes it's very real, but it is used as a black-and-white "any and all inflation is bad" thing like in my example, especially when discussed on its own instead of holistically combined with things like economic growth and interest rates and other things.
machiaweliczny 6y ago
Minimum wage just forces some ppl to do more productive stuff. It will take away some jobs but you probably dont want such jobs in developed country. It's just better to allow more part-time work IMO. I would like some opinion of Dutch ppl on their part time work law, which seems interesting to me.
- NortySpock 6y ago
  "probably dont want such jobs in developed country" You don't want cashiers, wait staff, grocery baggers or call center staff? All of these jobs are generally minimum wage.
  - machiaweliczny 6y ago
    Yeah if you arent willing to pay them living wage you probably don't. I'm fine with paying little more than handling it myself. I think amazon Go style shops will get popular. These people probably can transition to different parts of service economy well. Low skill call centers are total waste of human time, that's why most of it is outsourced. UX just can get improved instead.
    - macspoofing 6y ago
      >Yeah if you arent willing to pay them living wage you probably don't. What if they are willing to work for less because it serves their purpose (like a foot in the door in the industry, or something else that you and I can't even think of). For example, we allow unpaid internships because we see the value of it. What about an internship that pays a little? Isn't that better for all? The problem is you're taking choice away from people who may want it or need it. Why do you think you know better what's good for them than they do?
      - machiaweliczny 6y ago
        Yeah, foot in the door to work in McDonalds so you can what? Be manager one day and afford to have family? Foot in the door as cleaning lady to be hired as secretary? Maybe. Basically min wage should be defined as basic needs for individual. I don't think that many people will chose to go for lower than that for future personal gain. Anyway that's what democracy is for :)
JumpCrisscross 6y ago
> it isn't inflationary. You're not creating new money Nitpick. We have no evidence minimum wage increases are inflationary. (We have evidence it is not [1][2].) But something doesn't have to create new money to be inflationary. Increasing money velocity causes inflation as much as printing bills. The poor spend their dollars in the real economy (as opposed to the wealthy, who buy GameStock calls). That increases demand for those goods and services, which can result in a price spike. Again, we don't have evidence of this happening. But theoretically, it's sound. (And less theoretically, it's why central banks can print pots of money while still fighting deflation.) [1] https://mpra.ub.uni-muenchen.de/36750/1/MPRA_paper_36750.pdf https://mpra.ub.uni-muenchen.de/36750/1/MPRA_paper_36750.pdf [2] https://www.econstor.eu/bitstream/10419/20104/1/dp861.pdf https://www.econstor.eu/bitstream/10419/20104/1/dp861.pdf
- macspoofing 6y ago
  OK .. so when price of flowers goes up prior to Valentine's day, that's inflation?
  - JumpCrisscross 6y ago
    > when price of flowers goes up prior to Valentine's day, that's inflation? No. Inflation is a "a general rise in the price level in an economy over a period of time" [1]. A single product pricing up is not a "general rise," and a temporary spike before Valentine's Day isn't "over a period of time." [1] https://en.wikipedia.org/wiki/Inflation https://en.wikipedia.org/wiki/Inflation
    - macspoofing 6y ago
      OK! Fair enough!

__blockcipher__ 6y ago

Agreed, the reason minimum wage is bad policy and unethical is that you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation.

ClumsyPilot 6y ago
The minimum wage probably just increases costs if some items to cover minimum wage of those currently underpaid. You could argue about it, but calling it unethical seems far-fetched.
willcipriano 6y ago
If you made a minimum wage that was significantly above the prevailing wage I'd expect to see inflation in a economy like the US. My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock. We might not call that inflation in the economy generally as after all stocks would "deflate" during that time but in terms of living day to day it would be. Another potential mechanism would be if unemployment went up high enough due to a minimum wage increase that productivity decreases so much that the same number to dollars are chasing the results of less workers. That said, with the exception of very rural areas the wage floor for most moderately skilled or unpleasant work is above $15 an hour already, so this will probably not have much of a impact on poverty or inflation.
- macspoofing 6y ago
  >My wager would be that dollars that are currently chasing returns in the stock market may shift to wages resulting in those same dollars now trying to buy consumer goods rather than stock. OK ... but if the money supply stays the same, then all you're doing is just shifting the demand curves from one set of products (stocks) to another (TVs?). Put anther way, some things will go up, and some things will go down because spending habits changed. This happens now. It's not inflation just because the price of roses goes up in February.
  - willcipriano 6y ago
    I agree it isn't inflation in the classic sense, I'm not sure of a great term for this effect. A thought experiment, if I printed up a dollar for each one in circulation then put them in a vault that shouldn't cause inflation even though the money supply has doubled, similarly if in a thousand years someone opens the vault and puts those dollars into circulation inflation happens even though the money supply has unchanged. My thesis is dollars that go between hedge fund to hedge fund are "in a vault" compared to dollars that are buying food at the local Walmart. If some of those hedge fund dollars ends up in the hands of a individual (say a minimum wage increase causes firms to halt buybacks and direct that money toward payroll) that would cause inflation of consumer goods as now we have more dollars chasing the same output.
- anotherman554 6y ago
  This is an empirical question (if raising minimum wage effects inflation) so what you expect in terms of inflation doesn't really matter. This isn't a philosophy question where you can imagine the answer and get a best in class result. Since 2009 people on the Internet have been prophesizing about massive inflation and inflation has been extremely low. Maybe they will one day be right, but like the boy who cried wolf nobody should be listening to warnings about inflation from people on the internet, as a class they don't have any idea what they are talking about.
  - mjevans 6y ago
    Offhand, just from my own crummy bio memory of prices of things... I'd estimate about a 50% increase in food prices in about the last decade. I'd also estimate that the asking price of a house was completely out of whack even post the recession in 2008; it _never_ corrected in any of the west coast areas I live in. Still even that price has continued to go up due to inelastic supply and ever growing demand.
machiaweliczny 6y ago
Im from EU and I think that minimum wage is basically negotiation with employer on your behalf. Obviously the lowest earning people don't have resources to negotiate salary well. IMO it's probably better to define it on more granular lvl that federal. If someone earns less it should be considered gig not work and basically non even taxed.
jayd16 6y ago
>you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. B does not follow from A if demand is elastic. Minimum wage proponents assume enough labor demand is elastic.
whateveracct 6y ago
> But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation. Inflation is a boogeyman. I heard a friend of mine not wanting any sort of covid stimulus checks because it would make his and his family's savings depreciate.
- kyuudou 6y ago
  Huh? Inflation is very real. The dollars I saved from 20 years ago buy a lot less across the consumer spectrum. Prices don't go up, the money's purchasing power goes down. That is not a "boogeyman", it's theft by the inflation tax.
  - whateveracct 6y ago
    yes it's very real, but it is used as a black-and-white "any and all inflation is bad" thing like in my example, especially when discussed on its own instead of holistically combined with things like economic growth and interest rates and other things.

machiaweliczny 6y ago

Minimum wage just forces some ppl to do more productive stuff. It will take away some jobs but you probably dont want such jobs in developed country. It's just better to allow more part-time work IMO. I would like some opinion of Dutch ppl on their part time work law, which seems interesting to me.

NortySpock 6y ago
"probably dont want such jobs in developed country" You don't want cashiers, wait staff, grocery baggers or call center staff? All of these jobs are generally minimum wage.
- machiaweliczny 6y ago
  Yeah if you arent willing to pay them living wage you probably don't. I'm fine with paying little more than handling it myself. I think amazon Go style shops will get popular. These people probably can transition to different parts of service economy well. Low skill call centers are total waste of human time, that's why most of it is outsourced. UX just can get improved instead.
  - macspoofing 6y ago
    >Yeah if you arent willing to pay them living wage you probably don't. What if they are willing to work for less because it serves their purpose (like a foot in the door in the industry, or something else that you and I can't even think of). For example, we allow unpaid internships because we see the value of it. What about an internship that pays a little? Isn't that better for all? The problem is you're taking choice away from people who may want it or need it. Why do you think you know better what's good for them than they do?
    - machiaweliczny 6y ago
      Yeah, foot in the door to work in McDonalds so you can what? Be manager one day and afford to have family? Foot in the door as cleaning lady to be hired as secretary? Maybe. Basically min wage should be defined as basic needs for individual. I don't think that many people will chose to go for lower than that for future personal gain. Anyway that's what democracy is for :)

JumpCrisscross 6y ago

> it isn't inflationary. You're not creating new money Nitpick. We have no evidence minimum wage increases are inflationary. (We have evidence it is not [1][2].) But something doesn't have to create new money to be inflationary. Increasing money velocity causes inflation as much as printing bills. The poor spend their dollars in the real economy (as opposed to the wealthy, who buy GameStock calls). That increases demand for those goods and services, which can result in a price spike. Again, we don't have evidence of this happening. But theoretically, it's sound. (And less theoretically, it's why central banks can print pots of money while still fighting deflation.) [1] https://mpra.ub.uni-muenchen.de/36750/1/MPRA_paper_36750.pdf https://mpra.ub.uni-muenchen.de/36750/1/MPRA_paper_36750.pdf [2] https://www.econstor.eu/bitstream/10419/20104/1/dp861.pdf https://www.econstor.eu/bitstream/10419/20104/1/dp861.pdf

macspoofing 6y ago
OK .. so when price of flowers goes up prior to Valentine's day, that's inflation?
- JumpCrisscross 6y ago
  > when price of flowers goes up prior to Valentine's day, that's inflation? No. Inflation is a "a general rise in the price level in an economy over a period of time" [1]. A single product pricing up is not a "general rise," and a temporary spike before Valentine's Day isn't "over a period of time." [1] https://en.wikipedia.org/wiki/Inflation https://en.wikipedia.org/wiki/Inflation
  - macspoofing 6y ago
    OK! Fair enough!