81–83 of 83 posts
Earlier quoted context omitted.
It is strange! One of the problems some moderately poor people have is eating too much food.
For the first time in history, it is now possible to be obese and malnourished simultaneously.
I'm pretty sure this is not specific for the modern age, but perhaps the shift from undernourishment to malnourishment is.
Earlier quoted context omitted.
I think you are mistaken. Raising the minimum wage is exactly like inflation. Raising the minimum wage temporarily gives an advantage to those with the least power to set a price for their labor. This will increase demand for goods and services. In response to that increased demand, providers of goods and services will raise prices. Those with more bargaining power will set a higher price for their labor, and unskill…
Minimum wage is not the only variable which determines the value of money. You're forgetting the source of inflation itself: the federal reserve rate. Think: how could an increase in minimum wage cause inflation? For that to happen – for all goods and services across the board to increase in value – the amount of money in circulation would have to increase, or the economy would have to shrink. But increasing the mini…
Don't you agree that if you arbitrarily increase wages for a significant segment of the population, that segment will now want more of the goods and services they could not previously afford? Increased demand will drive up prices for those goods and services unless supply increases at the same time. If prices do go up, those with more bargaining power will seek higher returns for their labor. The net effect will be that almost everyone will see their income rise to some extent, but the supply of goods and services they are chasing is going to remain essentially the same. So almost all of us will be paying more for the same stuff. The only way that won't happen is if supply could magically increase at no extra cost – but that can't happen because we've raised the wages of all the people that supply those goods and services.
Earlier quoted context omitted.
Minimum wage is not the only variable which determines the value of money. You're forgetting the source of inflation itself: the federal reserve rate. Think: how could an increase in minimum wage cause inflation? For that to happen – for all goods and services across the board to increase in value – the amount of money in circulation would have to increase, or the economy would have to shrink. But increasing the mini…
I'm not sure that I understand your point. I'm not arguing that increasing minimum wage is the only cause of inflation. I was saying that like inflation, increasing minimum wage affects everyone in the economy eventually. Don't you agree that if you arbitrarily increase wages for a significant segment of the population, that segment will now want more of the goods and services they could not previously afford? Increa…
I don't disagree that the effects you describe happen; my point is that, because of controls on monetary supply, they cannot happen equally to everyone. Nor can a minimum wage hike cause inflation on its own. (Of course, one could coordinate a change in monetary policy to effect inflation which negates the change in minimum wage in exactly the way you describe. The assumption is that the government is not so stupid as to enact two self-defeating polices.)
Of course, whether a minimum wage hike is an appropriate way to achieve the goal of reducing income and wealth inequality is debatable, but it does have a (non-transient) economic effect, because the value of money is anchored by other, more influential, aspects of monetary policy than the minimum wage (namely, the federal reserve rate).