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>so when they take their more money to the market, they bid up the prices of goods and end up where they started, sometimes even a bit further behind. I haven'

by La1n 6y ago

>so when they take their more money to the market, they bid up the prices of goods and end up where they started, sometimes even a bit further behind. I haven't seen any evidence that this actually happens to a significant degree, could you link a study on it? Cause as far as I have read the inflation cause by minimum wage increases is relatively minimal, especially compared the the increase in income.

chordalkeyboard 6y ago
> I haven't seen any evidence that this actually happens to a significant degree, could you link a study on it? No and I’m not aware of a study that shows this, and although there may be one out there arguing one way or the other I’d be inclined to disregard it because a claim like “ceteris paribus bids on scarce resources drive up the price” isn’t empirically testable because ceteris is never paribus. Whatever study that argues anything of this nature is required to use a theory to interpret data and the theory that “prices are the emergent result of repeated bid-ask transactions between interested parties” is more basic than whatever theory they are going to use in those (hypothetical) studies. I’d be happy to entertain objections to my statement. > Cause as far as I have read the inflation cause by minimum wage increases is relatively minimal, especially compared the the increase in income. I’m not arguing that they will always end up with less money. I’m asserting that the increase in wage will all go to consumption goods/services that are provided by profitable businesses owned by “the rich and/or wealthy” and so the minimum wage earners will stay at subsistence level but the people who already own assets will profit. The relative motion of various prices is the result of many complicated factors and its likely that increased profits for the providers of these goods/services would cause more firms to enter the market and there would be more of these consumption items than before. But the people who own businesses would keep accumulating profit and the people at minimum wage would keep spending their entire paychecks on consumption items.

by La1n 6y ago

chordalkeyboard 6y ago

> I haven't seen any evidence that this actually happens to a significant degree, could you link a study on it? No and I’m not aware of a study that shows this, and although there may be one out there arguing one way or the other I’d be inclined to disregard it because a claim like “ceteris paribus bids on scarce resources drive up the price” isn’t empirically testable because ceteris is never paribus. Whatever study that argues anything of this nature is required to use a theory to interpret data and the theory that “prices are the emergent result of repeated bid-ask transactions between interested parties” is more basic than whatever theory they are going to use in those (hypothetical) studies. I’d be happy to entertain objections to my statement. > Cause as far as I have read the inflation cause by minimum wage increases is relatively minimal, especially compared the the increase in income. I’m not arguing that they will always end up with less money. I’m asserting that the increase in wage will all go to consumption goods/services that are provided by profitable businesses owned by “the rich and/or wealthy” and so the minimum wage earners will stay at subsistence level but the people who already own assets will profit. The relative motion of various prices is the result of many complicated factors and its likely that increased profits for the providers of these goods/services would cause more firms to enter the market and there would be more of these consumption items than before. But the people who own businesses would keep accumulating profit and the people at minimum wage would keep spending their entire paychecks on consumption items.