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Earlier quoted context omitted.
people living in poverty don’t have “savings”
Why not? Even under communism when nobody really had money, my grandmother would diligently squirrely as much as she could. My dad did as well, in order to save up for his eventual emigration. There are ways to live below your means under even extreme situations.
If the cost of living is equal or greater than your income, saving is impossible.
Earlier quoted context omitted.
> Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have. are you suggesting the newly-proposed $15 minimum wage will cause inflation so bad it will destroy people's savings?
I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever decreases poverty, and has a good chance of increasing unemployment, and is a one-size-fits all ($15/hr in NY, is different than $15/hr in Alabama) ... but it isn't inflationary. You're not creating new money.
Earlier quoted context omitted.
Why not? Even under communism when nobody really had money, my grandmother would diligently squirrely as much as she could. My dad did as well, in order to save up for his eventual emigration. There are ways to live below your means under even extreme situations.
Because food and shelter cost nearly 100% of people’s incomes. If the cost of living is equal or greater than your income, saving is impossible.
There are ways to live below your means in America. You may need social assistance if you're in hard times (and that's OK, that's what it's there for), but there is. If you say otherwise, you're just making things up.
I said this in another post, but I can guarantee you that even in places like North Korea, people are squirreling away the little they have, just as my grandmother did. It's possible to save even under poverty and/or extreme situations. And America isn't North Korea.
Let them eat stonks (Downvotes? "Let them eat cake" is the traditional translation of the French phrase "Qu'ils mangent de la brioche", spoken in the 17th or 18th century by "a great princess" upon learning that the peasants had no bread.)
This and a spiraling mental health crisis are predictable outcomes from poor public health policies executed during the pandemic. For unskilled labor jobs like the service industry, lockdowns are devastating which has fueled the inequality fire in 2020. Now, talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom mi…
This statement is only true, and then only formally, if you limit yourself to considering first order effects. The distributive effects of minimum wage policies will alter final consumer demand, which will have an impact on capital structure and demand for labor. Formally speaking, the overall effect on any given worker depends logically on elasticities of demand for different consumer goods and labor.
But most people don't care about the "Econ 101" model because they (rightly) suspect that it covers a special case that isn't relevant to real-world decision making. Econometric research paints a much more complicated picture.
https://www.theatlantic.com/business/archive/2017/01/economi...
Let them eat stonks (Downvotes? "Let them eat cake" is the traditional translation of the French phrase "Qu'ils mangent de la brioche", spoken in the 17th or 18th century by "a great princess" upon learning that the peasants had no bread.)
Did you mean "stocks"?
The government's monetary policy, along with widespread retail call option trading, have turned certain "hot" parts of the stock market into stonks, prices rising parabolically or exponentially, making gamblers very rich
Behold: https://www.reddit.com/r/wallstreetbets/
Low interest rates have recently produced extreme asset price inflation (e.g., record stock market prices) despite suffering in the real economy
The wealth gap is widening in an unprecedented way
Let them eat stonks (Downvotes? "Let them eat cake" is the traditional translation of the French phrase "Qu'ils mangent de la brioche", spoken in the 17th or 18th century by "a great princess" upon learning that the peasants had no bread.)
Did you mean "stocks"?
Earlier quoted context omitted.
I think that's what OP is saying and if that's the case, they are wrong. Minimum wage is not inflationary. It has other problems like the fact it never ever decreases poverty, and has a good chance of increasing unemployment, and is a one-size-fits all ($15/hr in NY, is different than $15/hr in Alabama) ... but it isn't inflationary. You're not creating new money.
Agreed, the reason minimum wage is bad policy and unethical is that you're making it illegal to pay someone below a certain threshold, which stated differently is making it illegal for a sufficiently unskilled worker to get any job. But I don't see how minimum wage could be inflationary, but if it were it certainly wouldn't be enough to "wipe out savings" - that requires hyperinflation.
Another potential mechanism would be if unemployment went up high enough due to a minimum wage increase that productivity decreases so much that the same number to dollars are chasing the results of less workers.
That said, with the exception of very rural areas the wage floor for most moderately skilled or unpleasant work is above $15 an hour already, so this will probably not have much of a impact on poverty or inflation.