4 ms·

It will be interesting to try to see what happens in Seattle after passing the $15 minimum wage. It will take years to fully implement, which will mask the cau

by pdx 12y ago

It will be interesting to try to see what happens in Seattle after passing the $15 minimum wage. It will take years to fully implement, which will mask the cause/effect, unfortunately. I do this thought experiment. If I write every person in America a check for one million dollars, who have I actually helped? In my thought experiment, the prices of everything will instantly rise to compensate for the increased wealth, and everybody will be exactly where they are now, just with more zeros on all their bills and paychecks. I suspect that rent prices in Seattle, which are already high, will rise very rapidly, to relieve these workers of their extra income. That the wage increase will take place over a few years time is unfortunate, as this effect will be deniable by those who choose to deny it. But this is what my gut is telling me will happen. So, amusingly, it will be those evil 1% landlords, who will actually win, not the minimum wage workers, who will be exactly where they are now.

okaram 12y ago
If you write a check for 1M to every person in America, you help the poorest; if I have $0 I cannot afford anything; you give me 1M now I can get about 1/300M of the total of things. I assume rents (and other things) will rise even more in Seattle, but not to take the whole increase; the 1% will always make lots of money, but hopefully the bottom 10% gets a slightly higher piece of the pie
Istof 12y ago
this is called trickle-up economics
asgard1024 12y ago
I think you are wrong, because you assume that the ability of people to exert power (to influence prices, for example) is independent on income. But that's probably not true. So for example, in your thought experiment, some of the people could start a business with that million of dollars (invest it), and become more independent. That would be competition (or substitute, depends how you look at it), and it would prevent from rising the real price to the original level. If you suddenly give everyone a big sum of money (which is resources), you actually equalize power.
brg 12y ago
The minimum wage hike, coupled with property tax increases for transit, bridge tolling, and lack of effective transportation options will result increased investment and growth in the Eastside of the Seattle Metro region. Bellevue is already undergoing a economic boom, and thanks in no small part to the action of the Seattle city council and King county I don't think there is an end to that in sight.
true_religion 12y ago
> In my thought experiment, the prices of everything will instantly rise to compensate for the increased wealth, and everybody will be exactly where they are now, just with more zeros on all their bills and paychecks. Well that's true if America is a closed economy without connection to the rest of the world. I could say that manufactured good prices shouldn't increase too drastically as they are made elsewhere, but that'd only be assuming that everyone in the US continues living their life as they already have. But this is a revolutionary change, so it ought to have revolutionary outcomes. Possibility #1: US loosens immigration controls as everyone is cash-rich. A flood of Mexican and Canadian immigrants enter the country to become the new middle and lower classes. Prices normalize rapidly after a brief spike. Possibility #2: Seeing the writing on the wall, Americans flee their country en masse, taking up residence everywhere in the world from Europe to Africa to Asia. These cash-rich Americans take advantage of the fact that local prices elsewhere can't change to compensate for their newfound wealth. The US dies. This is ofcourse all assuming that everyone can offload their cash into something valuable before the US economy goes into a slump, making American dollars less valuable.
skybrian 12y ago
If you're going to do a thought experiment you need to think a little deeper. Most home owners would be able to pay off their mortgages and own their homes. All student debts would be easily paid off, and then some. Much inequality (outside the 1%) would vanish temporarily, since the difference between 1 million and 1 million and a small amount of savings isn't that much. People would try to spend their money, resulting in much more demand, bottlenecks, and shortages. Of course this leads to inflation, but it also means the recession is over. Businesses would run out of everything and try to expand to try to meet supply, but their suppliers would raise prices too, maybe too high to make a profit. It would be a chaotic situation and people on fixed incomes would be screwed once the money runs out. It's hard to plan a business under these circumstances, but I'm sure some people would be smart enough to figure out a good plan. So this is not "back where we started." It's a big reset that changes just about everything and probably a big disaster if it's sprung onto people without warning. On the other hand, if properly planned and at a smaller scale, it could have some good effects. Giving an equal amount of money to everyone would work better than giving it to banks.

by pdx 12y ago

okaram 12y ago

If you write a check for 1M to every person in America, you help the poorest; if I have $0 I cannot afford anything; you give me 1M now I can get about 1/300M of the total of things. I assume rents (and other things) will rise even more in Seattle, but not to take the whole increase; the 1% will always make lots of money, but hopefully the bottom 10% gets a slightly higher piece of the pie

Istof 12y ago

this is called trickle-up economics

asgard1024 12y ago

I think you are wrong, because you assume that the ability of people to exert power (to influence prices, for example) is independent on income. But that's probably not true. So for example, in your thought experiment, some of the people could start a business with that million of dollars (invest it), and become more independent. That would be competition (or substitute, depends how you look at it), and it would prevent from rising the real price to the original level. If you suddenly give everyone a big sum of money (which is resources), you actually equalize power.

brg 12y ago

The minimum wage hike, coupled with property tax increases for transit, bridge tolling, and lack of effective transportation options will result increased investment and growth in the Eastside of the Seattle Metro region. Bellevue is already undergoing a economic boom, and thanks in no small part to the action of the Seattle city council and King county I don't think there is an end to that in sight.

true_religion 12y ago

> In my thought experiment, the prices of everything will instantly rise to compensate for the increased wealth, and everybody will be exactly where they are now, just with more zeros on all their bills and paychecks. Well that's true if America is a closed economy without connection to the rest of the world. I could say that manufactured good prices shouldn't increase too drastically as they are made elsewhere, but that'd only be assuming that everyone in the US continues living their life as they already have. But this is a revolutionary change, so it ought to have revolutionary outcomes. Possibility #1: US loosens immigration controls as everyone is cash-rich. A flood of Mexican and Canadian immigrants enter the country to become the new middle and lower classes. Prices normalize rapidly after a brief spike. Possibility #2: Seeing the writing on the wall, Americans flee their country en masse, taking up residence everywhere in the world from Europe to Africa to Asia. These cash-rich Americans take advantage of the fact that local prices elsewhere can't change to compensate for their newfound wealth. The US dies. This is ofcourse all assuming that everyone can offload their cash into something valuable before the US economy goes into a slump, making American dollars less valuable.

skybrian 12y ago

If you're going to do a thought experiment you need to think a little deeper. Most home owners would be able to pay off their mortgages and own their homes. All student debts would be easily paid off, and then some. Much inequality (outside the 1%) would vanish temporarily, since the difference between 1 million and 1 million and a small amount of savings isn't that much. People would try to spend their money, resulting in much more demand, bottlenecks, and shortages. Of course this leads to inflation, but it also means the recession is over. Businesses would run out of everything and try to expand to try to meet supply, but their suppliers would raise prices too, maybe too high to make a profit. It would be a chaotic situation and people on fixed incomes would be screwed once the money runs out. It's hard to plan a business under these circumstances, but I'm sure some people would be smart enough to figure out a good plan. So this is not "back where we started." It's a big reset that changes just about everything and probably a big disaster if it's sprung onto people without warning. On the other hand, if properly planned and at a smaller scale, it could have some good effects. Giving an equal amount of money to everyone would work better than giving it to banks.