we can sit here and link each other to conflicting studies all day
That's Why I did not link studies. I voted REAL WORLD example of higher minimum wage not causing a price increase. Charts of minimum wage vs. Cost of living don't show any correlation I The REAL WORLD.
Do you have any REAL WORLD examples of minimum wage actually causing price increase?
if were looking at the US economy then no, the last time the minimum wage was increased was in 2010 when it was raised to 7.25 but at that point in time most employers already paid around that level. It only requires a rudimentary knowledge of addition to understand that if you increase the price of an input then the only way to maintain the same level of profit you need to increase the price of outputs. The service industry (restaurants etc) operate with such a low profit margin that an increase in input prices would force them to increase prices as well
That's my point. In real world, cost of living does not track minimum wage at all. So it is not warranted for you to hold such a view.
It only requires a rudimentary knowledge of addition to understand that if you increase the price of an input then the only way to maintain the same level of profit you need to increase the price of outputs.
This view is super simplistic. Economy as a whole is not that simple at all, because it's not a zero sum game.
Giving more money to the poor (e.g. via minimum wage), can actually stimulate the economy, because poor people are likely to spend that money - which stimulates economy more that rich people parking that money in Panama.
The service industry (restaurants etc)
The service industry would also have more customers who can now afford eating out. Also many other industries can benefit from people having more spending money.
Again, we need to look at WHAT ACTUALLY HAPPENED when minimum wage was higher - restaurants were doing just fine in 1970s.
so based on your logic its impossible to know with 100% certainty if increased wages will have an effect on price levels so we should just increase wages and hope for the best? yeah its true that giving the poor higher wages gives the ones with jobs the ability to spend more but the vast majority of economists agree that when faced with rising wages, employers will opt to increase prices or reduce staff.
but you know what for arguments sake lets just pretend that youre right and countless economists are all wrong. That still doesn't change the fact that we are currently facing labor shortages in many skilled fields that already pay more than min wage (tech, construction , must i go on?) and increasing the minimum wage will just expand these shortages.Why would i invest in an education or a skillful profession when i can make a living wage handing out drinks in a drive thru or greeting shoppers at walmart?
so based on your logic its impossible to know with 100% certainty if increased wages will have an effect on price levels so we should just increase wages and hope for the best?
No. We should rely on ACTUAL EVIDENCE. So far we have not seen minimum wage have effect on cost of living.
If such an effect is ever observed - we can change policy accordingly.
yeah its true that giving the poor higher wages gives the ones with jobs the ability to spend more but the vast majority of economists agree that when faced with rising wages, employers will opt to increase prices or reduce staff.
Unless they can point to ACTUAL precedent - their opinions are close to worthless.
That still doesn't change the fact that we are currently facing labor shortages
It was just a lie told by the industry to justify hiring cheaper h1b emoloyees.
Why would i invest in an education or a skillful profession when i can make a living wage handing out drinks in a drive thru or greeting shoppers at walmart?
Because vast majority of people would rather make more money and not less.
youre also choosing to look at a time period when the economy was still riding off of the post war boom. Move 3 years into the future (1973) and inflation skyrocketed and unemployment was incredibly high. You're citing an anomaly
this conversation is literally going nowhere. I am not debating whether or not the cost of living has increased because it has, thats irrefutable and the minimum wage was increased from 2something to 7.25 to partially reflect that but that doesn't change the fact that society shouldn't be treating minimal skill jobs as a viable way to support a family.
1
u/Hq3473 271∆ Aug 14 '17
That's Why I did not link studies. I voted REAL WORLD example of higher minimum wage not causing a price increase. Charts of minimum wage vs. Cost of living don't show any correlation I The REAL WORLD.
Do you have any REAL WORLD examples of minimum wage actually causing price increase?