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The thing is, you assumed what I believe. I'm actually in favor of higher minimum wages and indexing to costs. But the feedback-loop nature of the economic sy

The thing is, you assumed what I believe. I'm actually in favor of higher minimum wages and indexing to costs. But the feedback-loop nature of the economic system, or any feedback system (where future output numbers of the system depend on previous outputs), must be acknowledged and accounted for, or else you will, mathematically, get exponential growth and/or oscillation. I also have a lot of family who currently live just fine making less than $15/hr. Their employers (small businesses) would have to raise prices (or go out of business, or both), which would raise costs, which would raise the CoL index, which would raise future minimum wages in a feedback cycle, if there is not some compensating factor in how wages and prices are set.

ryandrake 6y ago
> Their employers (small businesses) would have to raise prices If the market would bear it and they could increase prices profitably, why wouldn’t they just do it today, regardless of wages?
- TchoBeer 6y ago
  Because then they would lose profits. If labor becomes more expensive, maximal profit would be found at producing less and charging more, but overall profit would decrease.
  - Robotbeat 6y ago
    ...you’re ignoring demand effects. Higher wages means more aggregate demand. Empirical research on minimum wage increases shows that this basically fully compensates for hypothetical disemployment effects.