3 ms·
the cost of living is higher partially because of the higher minimum wage laws. the market charges whatever the consumer is willing to pay. when the consumer
by nazgulnarsil 17y ago
the cost of living is higher partially because of the higher minimum wage laws. the market charges whatever the consumer is willing to pay. when the consumer makes more money expect to see a gradual increase in the prices of products popular with those consumers.
- philwelch 17y agoYou're talking about inflation, and the honest thing to say is "we're not sure what causes inflation". Monetarists think it's mostly a supply-and-demand thing with the money supply outpacing economic growth, for instance. But, of course, inflation is sometimes thought to be only one component of the cost of living. In macro, there's two measures of inflation: the cost of living index (which is based on the cost of living and a market basket of equivalent goods) and a factor that is used to adjust nominal GDP measurements from year to year. Cost-of-living may change based on efficiencies (for instance, Wal-Mart has been credited with single-handedly holding down the cost of living for years) while the GDP factor is more closely tied to "true" inflation. In other words, you may be right but cost of living is fucking complicated.