3 ms·

...or they'd just raise the price of a banana to $4, to keep relative profits the same, people would earn more than previously, but everything would be more exp

...or they'd just raise the price of a banana to $4, to keep relative profits the same, people would earn more than previously, but everything would be more expensive. Say what you want, we do buy and own a lot more stuff than we did in history. The only unfair thing here is, why does amazon pay (relatively, percentually) less tax than local banana stand.

dangus 5y ago
> ...or they'd just raise the price of a banana to $4, to keep relative profits the same I'd say for many products they can't actually do that because there's only so much demand. Also, because middle and higher earners wouldn't be getting the same kind of raises that the minimum wage folks would get if the minimum wage were raised. If you're above minimum wage, you're essentially being paid at a market equilibrium rate: an intersection of supply and demand. But if you're at minimum wage, you're at "the company would pay you less if they were legally allowed to" territory. My point is that "everything would be more expensive" would actually be a net benefit to the lowest earners. Labor is very nearly never 100% of the purchase price of a product or service. So, if you increase your labor cost by 100%, that doesn't mean the product's price increased by 100%, because labor is only one component of a product's price. It's the same math that makes living in HCOL areas worth the expense (e.g.: increase your expenses by 50% and your wage by 50%. As long as you are paying less than 100% of your wage into your expenses that's a net gain). McDonald's in Denmark is a great example. Their employees make well over $20 an hour and have 6 weeks vacation. Big Macs in Denmark don't cost double the price, but the workers are paid just about double depending on which region in the US you compare to.

3 ms·

...or they'd just raise the price of a banana to $4, to keep relative profits the same, people would earn more than previously, but everything would be more exp

by ajsnigrutin 5y ago

dangus 5y ago
> ...or they'd just raise the price of a banana to $4, to keep relative profits the same I'd say for many products they can't actually do that because there's only so much demand. Also, because middle and higher earners wouldn't be getting the same kind of raises that the minimum wage folks would get if the minimum wage were raised. If you're above minimum wage, you're essentially being paid at a market equilibrium rate: an intersection of supply and demand. But if you're at minimum wage, you're at "the company would pay you less if they were legally allowed to" territory. My point is that "everything would be more expensive" would actually be a net benefit to the lowest earners. Labor is very nearly never 100% of the purchase price of a product or service. So, if you increase your labor cost by 100%, that doesn't mean the product's price increased by 100%, because labor is only one component of a product's price. It's the same math that makes living in HCOL areas worth the expense (e.g.: increase your expenses by 50% and your wage by 50%. As long as you are paying less than 100% of your wage into your expenses that's a net gain). McDonald's in Denmark is a great example. Their employees make well over $20 an hour and have 6 weeks vacation. Big Macs in Denmark don't cost double the price, but the workers are paid just about double depending on which region in the US you compare to.