3 ms·

The fact that there hasn't been a federal minimum wage hike in 14 years should tell you we live in a fake democracy. Inflation robs the working class of power

The fact that there hasn't been a federal minimum wage hike in 14 years should tell you we live in a fake democracy. Inflation robs the working class of power without ever having to get so much as a bill past congress, and it's no accident. The "Inflation reduction act" should have been nothing more than a bill that locks automatic increases to the minimum wage to accumulated inflation. The fact that it was anything else means it wasn't about reducing inflation at all, because the only way to do that is to destroy money. The only way to reduce the impact of inflation is to raise wages. The bill did neither, of course.

g_delgado14 3y ago
Increasing wages is itself inflationary. If the costs of a company increase then so too do the price of their product or service. I’m not disagreeing that we shouldn’t increase wages, but I just want to point out that wages and inflation are correlated.
- Vicinity9635 3y ago
  [dead]
- rqtwteye 3y ago
  Considering that company profits and the income of the top 20% went up, it seems fair that other income goes up too. There may be some inflation but I think wage earners would still be much better off.
- asdff 3y ago
  With that logic you might as well pay no one anything because that would increase the prices. It just doesn't pencil out logically when you think it through. Fact is, wages are historically depressed. We've shown you can have higher ratios of wages to prices in the past, we've just never bothered to keep the ratio maintained as we've seen GDP growth over the years, and have instead favored having the capital class to gobble up the resulting gains instead of seeing more redistribution of all of this accumulated wealth as in years past.
- chownie 3y ago
  Increasing wages correlates with inflation, but it's a _very_ weak correlation. In most industries labour does not make up the lion's share of business expenses. Studying minimum wage increases between 1978 and 2015: > we find prices grow by 0.36 percent for every 10 percent increase in the minimum wage. https://research.upjohn.org/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1278&context=up_workingpapers https://research.upjohn.org/cgi/viewcontent.cgi?referer=&htt...
jayd16 3y ago
I'm for wage increases but wouldn't that push inflation higher? Raising interest rates and a funding package to weather the hit seems reasonable to me.
- metabagel 3y ago
  I’m skeptical that consumption by the working poor is what drives inflation.
jandrewrogers 3y ago
The Federal minimum wage isn’t relevant in the vast majority of States that set their own minimum wage. This is a good thing; the US is too geographically and economically diverse to have a single minimum wage. The minimum wage in expensive places like Seattle is the median wage in States with weaker economies and lower costs of living.
- fredgrott 3y ago
  the problem with that argument is that the State minimum wage set is always at the Federal rate or higher...never ever lower...that destroys your point
  - cplusplusfellow 3y ago
    It's a strong argument for keeping the Federal rate low, since it needs to effectively peg the lowest COL area (which may not be able to support higher wages).
    - metabagel 3y ago
      Maybe, but it’s too low across the board.
      - cplusplusfellow 3y ago
        Should we accept your word for it or should we receive some evidence?
- metabagel 3y ago
  Your argument doesn’t address that the federal minimum wage is too low in the states where it is not superseded by a state minimum wage law.
  - Aunche 3y ago
    The minimum wage also applies to Puerto Rico, where the median household income is about 21K. That's less than a what a dual income household would bring in making minimum wage.
legitster 3y ago
Minimum wage is not a very useful policy, especially in a system with relatively low workforce participation. Firstly, minimum wage is politically unpopular in most areas. Keep in mind the median voter is older or retired and cares more about expenses than income. So even modest cost of living increases can have huge political repercussions. Secondly, minimum wages are very inefficient as a poverty reduction policy. For every dollar you impose on businesses, a % is going to be eaten by inflation, a % is going to into reduced labor demand, and a % is going to families well above the poverty line (second or third household earners). This is why you see lots of Western countries not even bother with them. (Minimum wage as a policy to induce immigration - that's another story).
- enragedcacti 3y ago
  > Firstly, minimum wage is politically unpopular in most areas. In the US raising the minimum wage is wildly popular, with 89% wanting to raise it some amount and 62% supporting $15/hr. > For every dollar you impose on businesses, a % is going to be eaten by inflation, a % is going to into reduced labor demand, and a % is going to families well above the poverty line (second or third household earners). Only if you assume a perfectly efficient labor market, which is often far from how things play out in studies regarding the minimum wage. > This is why you see lots of Western countries not even bother with them. There are only a handful of western countries without a minimum wage and most of them either have very strong collective bargaining, a strong social safety net with some form of guaranteed minimum income, or both. I think those are reasonable policies but they aren't what opponents of the minimum wage are generally advocating for. https://www.pewresearch.org/short-reads/2021/04/22/most-americans-support-a-15-federal-minimum-wage/ https://www.pewresearch.org/short-reads/2021/04/22/most-amer...
- cristiancavalli 3y ago
  > Firstly, minimum wage is politically unpopular in most areas. You’re so wrong it’s actually astounding: https://www.pewresearch.org/short-reads/2021/04/22/most-americans-support-a-15-federal-minimum-wage/ https://www.pewresearch.org/short-reads/2021/04/22/most-amer... https://www.dataforprogress.org/blog/2023/5/24/725-isnt-cutting-it-in-this-economy-voters-support-raising-the-minimum-wage-to-20-per-hour https://www.dataforprogress.org/blog/2023/5/24/725-isnt-cutt... https://www.graydc.com/2023/04/21/study-finds-that-23-americans-support-raising-federal-minimum-wage/ https://www.graydc.com/2023/04/21/study-finds-that-23-americ... > This is why you see lots of Western countries not even bother with them. Again you’re just so wrong: most of Europe has a much better adjusted minimum wage: https://en.wikipedia.org/wiki/List_of_European_Union_member_states_by_minimum_wage https://en.wikipedia.org/wiki/List_of_European_Union_member_... > Secondly, minimum wages are very inefficient as a poverty reduction policy. For every dollar you impose on businesses, a % is going to be eaten by inflation, a % is going to into reduced labor demand, and a % is going to families well above the poverty line (second or third household earners). Just wrong again: https://www.rwjf.org/en/insights/our-research/2022/08/exploring-the-effects-of-a-15-an-hour-federal-minimum-wage-on-poverty-earnings-and-net-family-resources.html https://www.rwjf.org/en/insights/our-research/2022/08/explor... https://www.brookings.edu/articles/higher-regional-minimum-wages-can-lift-half-of-struggling-households-into-economic-self-sufficiency/ https://www.brookings.edu/articles/higher-regional-minimum-w... https://thehill.com/changing-america/respect/poverty/3636046-a-15-minimum-wage-could-lift-7-6-million-americans-out-of-poverty/ https://thehill.com/changing-america/respect/poverty/3636046... Even the CBO generally disagrees with your falsehoods: https://www.cbo.gov/publication/55681 https://www.cbo.gov/publication/55681 Why spread misinformation?

g_delgado14 3y ago

Increasing wages is itself inflationary. If the costs of a company increase then so too do the price of their product or service. I’m not disagreeing that we shouldn’t increase wages, but I just want to point out that wages and inflation are correlated.

Vicinity9635 3y ago
[dead]
rqtwteye 3y ago
Considering that company profits and the income of the top 20% went up, it seems fair that other income goes up too. There may be some inflation but I think wage earners would still be much better off.
asdff 3y ago
With that logic you might as well pay no one anything because that would increase the prices. It just doesn't pencil out logically when you think it through. Fact is, wages are historically depressed. We've shown you can have higher ratios of wages to prices in the past, we've just never bothered to keep the ratio maintained as we've seen GDP growth over the years, and have instead favored having the capital class to gobble up the resulting gains instead of seeing more redistribution of all of this accumulated wealth as in years past.
chownie 3y ago
Increasing wages correlates with inflation, but it's a _very_ weak correlation. In most industries labour does not make up the lion's share of business expenses. Studying minimum wage increases between 1978 and 2015: > we find prices grow by 0.36 percent for every 10 percent increase in the minimum wage. https://research.upjohn.org/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1278&context=up_workingpapers https://research.upjohn.org/cgi/viewcontent.cgi?referer=&htt...

jayd16 3y ago

I'm for wage increases but wouldn't that push inflation higher? Raising interest rates and a funding package to weather the hit seems reasonable to me.

metabagel 3y ago
I’m skeptical that consumption by the working poor is what drives inflation.

jandrewrogers 3y ago

The Federal minimum wage isn’t relevant in the vast majority of States that set their own minimum wage. This is a good thing; the US is too geographically and economically diverse to have a single minimum wage. The minimum wage in expensive places like Seattle is the median wage in States with weaker economies and lower costs of living.

fredgrott 3y ago
the problem with that argument is that the State minimum wage set is always at the Federal rate or higher...never ever lower...that destroys your point
- cplusplusfellow 3y ago
  It's a strong argument for keeping the Federal rate low, since it needs to effectively peg the lowest COL area (which may not be able to support higher wages).
  - metabagel 3y ago
    Maybe, but it’s too low across the board.
    - cplusplusfellow 3y ago
      Should we accept your word for it or should we receive some evidence?
metabagel 3y ago
Your argument doesn’t address that the federal minimum wage is too low in the states where it is not superseded by a state minimum wage law.
- Aunche 3y ago
  The minimum wage also applies to Puerto Rico, where the median household income is about 21K. That's less than a what a dual income household would bring in making minimum wage.

legitster 3y ago

Minimum wage is not a very useful policy, especially in a system with relatively low workforce participation. Firstly, minimum wage is politically unpopular in most areas. Keep in mind the median voter is older or retired and cares more about expenses than income. So even modest cost of living increases can have huge political repercussions. Secondly, minimum wages are very inefficient as a poverty reduction policy. For every dollar you impose on businesses, a % is going to be eaten by inflation, a % is going to into reduced labor demand, and a % is going to families well above the poverty line (second or third household earners). This is why you see lots of Western countries not even bother with them. (Minimum wage as a policy to induce immigration - that's another story).

enragedcacti 3y ago
> Firstly, minimum wage is politically unpopular in most areas. In the US raising the minimum wage is wildly popular, with 89% wanting to raise it some amount and 62% supporting $15/hr. > For every dollar you impose on businesses, a % is going to be eaten by inflation, a % is going to into reduced labor demand, and a % is going to families well above the poverty line (second or third household earners). Only if you assume a perfectly efficient labor market, which is often far from how things play out in studies regarding the minimum wage. > This is why you see lots of Western countries not even bother with them. There are only a handful of western countries without a minimum wage and most of them either have very strong collective bargaining, a strong social safety net with some form of guaranteed minimum income, or both. I think those are reasonable policies but they aren't what opponents of the minimum wage are generally advocating for. https://www.pewresearch.org/short-reads/2021/04/22/most-americans-support-a-15-federal-minimum-wage/ https://www.pewresearch.org/short-reads/2021/04/22/most-amer...
cristiancavalli 3y ago
> Firstly, minimum wage is politically unpopular in most areas. You’re so wrong it’s actually astounding: https://www.pewresearch.org/short-reads/2021/04/22/most-americans-support-a-15-federal-minimum-wage/ https://www.pewresearch.org/short-reads/2021/04/22/most-amer... https://www.dataforprogress.org/blog/2023/5/24/725-isnt-cutting-it-in-this-economy-voters-support-raising-the-minimum-wage-to-20-per-hour https://www.dataforprogress.org/blog/2023/5/24/725-isnt-cutt... https://www.graydc.com/2023/04/21/study-finds-that-23-americans-support-raising-federal-minimum-wage/ https://www.graydc.com/2023/04/21/study-finds-that-23-americ... > This is why you see lots of Western countries not even bother with them. Again you’re just so wrong: most of Europe has a much better adjusted minimum wage: https://en.wikipedia.org/wiki/List_of_European_Union_member_states_by_minimum_wage https://en.wikipedia.org/wiki/List_of_European_Union_member_... > Secondly, minimum wages are very inefficient as a poverty reduction policy. For every dollar you impose on businesses, a % is going to be eaten by inflation, a % is going to into reduced labor demand, and a % is going to families well above the poverty line (second or third household earners). Just wrong again: https://www.rwjf.org/en/insights/our-research/2022/08/exploring-the-effects-of-a-15-an-hour-federal-minimum-wage-on-poverty-earnings-and-net-family-resources.html https://www.rwjf.org/en/insights/our-research/2022/08/explor... https://www.brookings.edu/articles/higher-regional-minimum-wages-can-lift-half-of-struggling-households-into-economic-self-sufficiency/ https://www.brookings.edu/articles/higher-regional-minimum-w... https://thehill.com/changing-america/respect/poverty/3636046-a-15-minimum-wage-could-lift-7-6-million-americans-out-of-poverty/ https://thehill.com/changing-america/respect/poverty/3636046... Even the CBO generally disagrees with your falsehoods: https://www.cbo.gov/publication/55681 https://www.cbo.gov/publication/55681 Why spread misinformation?