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But we can't raise the minimum wage, because that would cause inflation! Or so I'm told.
by klyrs 3y ago
But we can't raise the minimum wage, because that would cause inflation! Or so I'm told.
- bequanna 3y agoFederal Government spending is a large contributor to inflation. It increased sharply during the pandemic and never corrected.
- trgn 3y agoPeople are spending the money they saved up during Covid on biggies (cars, home renovation , ...). More recently, sustained wage increases as well keep people spending (restaurants, travel, ...). Money really is washing out now. Wonder how long it will last.
- treesrule 3y agoThere is some evidence that increasing minimum wage increases the prices of goods for minimum wage workers so that their rising wages don't actually give them more buying power, also we can just not make it illegal to build new housing in places where there is already housing but ymmv.
- 111111IIIIIII 3y agoIf true then capitalism is fundamentally unjust and must be replaced.
- kneebonian 3y agoExactly we must have a workers revolution, where the buregious is overthrown and the streets run red with the blood of capitalists. Then when we have no more of those parasitic capitalists sucking out the blood of the working man we will establish a glorious dictatorship of the proletariat wherein all will care for and love one another equally, where profit will be no more and the goods and services will flow through the streets without end for every person to be able to do whatever they want. Then not long after the organs of the state will wither away as they will no longer be needed as tools of exploitation by those who own the means of production. Come comrade join me in this glorious future, for this time we will have REAL communism that will REALLY work, unlike all others that came before us.
- treesrule 3y agohttps://www.youtube.com/watch?v=vTKwL7eW-1Q https://www.youtube.com/watch?v=vTKwL7eW-1Q
- treesrule 3y agoIDK that this is a new argument? LMK though if you want a more full response
- 111111IIIIIII 3y agoWho said it's a new argument? My point holds regardless of how true or new the argument is.
- nobody9999 3y ago>There is some evidence that increasing minimum wage increases the prices of goods for minimum wage workers so that their rising wages don't actually give them more buying power I've heard this before, but I've never actually seen that "evidence." Can you point me in the right direction?
- treesrule 3y agohttps://marginalrevolution.com/marginalrevolution/2021/08/the-labor-market-ran-hot-real-wages-fell.html https://marginalrevolution.com/marginalrevolution/2021/08/th... This isn't exactly what i've claimed but its in the ballpark (sorry at work will try later to try and find something more specific)
- AlotOfReading 3y agoI don't see how it can be true that rising wages results in no net gain if vendors aren't increasing costs disproportionally to their inputs. A simple model of product cost is labor costs + "other things" like materials, retail overhead, etc, multiplied by some profit margin. If worker wages double, only the labor costs have doubled. The non-zero "other things" have not doubled (they may increase, but you can apply this argument recursively until you get to the base case), so the ultimate price cannot have increased by the same proportion. Thus, all workers should have a net gain.
- treesrule 3y agoone way this can hold everyones wages have increased so other inputs can also increase
- AlotOfReading 3y agoYes, I mentioned that already. The argument applies recursively, and the total increase is always less than the wage increase as long as there is some cost somewhere in the supply chain that is not responsive to wage increase. This could be land, or raw materials cost, or fixed tariffs, or fuel costs, compute, infrastructure, doesn't matter. The whole thing is a linear function, so doubling is the max increase that can occur, and any costs that don't respond must lower the ultimate increase.
- treesrule 3y agoAll of those things as far as I can tell can rise with wage increases as they will get more use? Except for Fixed Tariffs
- sonicshadow 3y agoIs inflation a myth to you? The lowest-paid people have seen the highest wage increases in the past several years, do you think the grocery store and Starbucks didn't adjust accordingly to raise prices?
- klyrs 3y ago> The lowest-paid people have seen the highest wage increases in the past several years, Do you have a source for this? Because CEOs, the people with enough money to own several properties for luxury and investment, have been consistently beating inflation while housing costs skyrocket. https://www.cnbc.com/2022/04/18/ceos-made-a-median-20-million-last-year254-times-more-than-the-average-worker.html https://www.cnbc.com/2022/04/18/ceos-made-a-median-20-millio...
- sonicshadow 3y agohttps://archive.ph/GhaL2 https://archive.ph/GhaL2 https://archive.ph/A9OTx https://archive.ph/A9OTx
- klyrs 3y agoInteresting that those look at quartiles and quintiles. The top 20% isn't necessarily "rich," the bottom of that bracket is barely able to afford homes today. The homelessness spike is not driven by the poorest getting relative wage increases faster than the middle class, which is the story presented in your sources. The homelessness spike is caused by 50 years of working class incomes growing slower than housing costs.
- sonicshadow 3y agoidk man u made me cite my sources, why dont you contribute and provide some relevant data
- klyrs 3y agoWhat do you mean you "don't know." Your sources don't support your claim. I did provide relevant data. But here's a primary source: https://www.bls.gov/spotlight/2022/inflation-experiences-for-lower-and-higher-income-households/home.htm https://www.bls.gov/spotlight/2022/inflation-experiences-for... Inflation hits lower income brackets harder. Wages in the lower brackets are not keeping up with inflation. The continuing spike in homelessness is a direct result of wage stagnation in the lower and middle classes. The notion that lifting people out of poverty will drive inflation is farcical and perpetuates the growing rates of homelessness and poverty. Think for yourself, "idk" isn't an excuse.
- local_crmdgeon 3y agoAlmost no one in the US makes minimum wage. Last I paid attention it was <2% of workers.