Why is the idea of raising minimum wage so popular?

george co wrote:

principles of economics wrote:

Economic costs are accounting costs plus opportunity costs.

Social costs include the concept that it is the right thing to do, but not in the context of subsidizing sloth. Rather it is viewed as necessary because the wages are not the perfectly competitive wages.

You might be right. Or may be wrong. I don't know.

I do know that if you can't communicate any better than this, how can you expect a dialog? I am but a commoner, but have no idea what you are trying to say.

If you make 6% return on the market, that is an accounting return.

If another opportunity, same risk profile, returned 8%, then your economic profit is -2%.

Decision-making is done by economic profits and losses, at least over the longer haul.

Economic benefits and costs are a deep concept and have many components, and I can imagine wikipedia has nice background on this. Such issues are covered in undergrad textbooks.

The OP is discussing a well-researched branch of labor economics, but doing so as though they just awakened.

Limousine Libertarian wrote:

Friedrich Engels wrote:

If you pay your McDonald's worker more, they can actually afford eating at McDonald's too.

It's actually quite uncapitalistic not to raise the wages. You want to have as many good paid workers as possible because they are also the ones who buy your stuff.

Even Walmart figured that out a little bit.

Economic growth is driven by capital investment, not consumption.

Symbiotic relationship in which both benefit.

let me know when you graduate

principles of economics wrote:

Limousine Libertarian wrote:

Economic growth is driven by capital investment, not consumption.

Symbiotic relationship in which both benefit.

Incorrect. Capital investment is the horse driving the cart.

I no longer teach at universities because of students like you.

I think you want the answer key prior to the test.

Limousine Libertarian wrote:

principles of economics wrote:

Symbiotic relationship in which both benefit.

Incorrect. Capital investment is the horse driving the cart.

Memorizing is not learning.

Keynes already explained when your assumption would be wrong.

Even Adam Smith dealt with the issues from 'glut of production'.

Limousine Libertarian wrote:

george co wrote:

So how does a person making $8 an hour buy their son/daughter a winter coat after rent, food, utilities, transportation, trip to the doctor............ What do we do to give everyone a minimum shot at a decent life?

For starters, don't enact a minimum wage law that will put them out of work and increase the rent and cost of living in their area.

All this trickle down bull crap has already been clearly blown out of the water. People aren't falling for that hokey nonsense anymore. The US got insanely rich. It didn't trickle down. Most Americans hardly improved financially in the last few decades of unprecedented wealth. That's actual evidence and proof...beats out hackneyed capitalist-apologist theory everytime.

Limousine Libertarian wrote:

Friedrich Engels wrote:

If you pay your McDonald's worker more, they can actually afford eating at McDonald's too.

It's actually quite uncapitalistic not to raise the wages. You want to have as many good paid workers as possible because they are also the ones who buy your stuff.

Even Walmart figured that out a little bit.

Economic growth is driven by capital investment, not consumption.

Of all the posts in this thread, this one is the most wrong. Economic growth is driven by the velocity of the US dollar. Investing that dollar actually slows it down. That’s why you can’t find any case histories where a state increased minimum wage and the economy contracted. That’s why tax cuts for the wealthy don’t trickle down. This is like intro to economics stuff

principles of economics wrote:

can I get change? wrote:

let me know when you graduate

I no longer teach at universities because of students like you.

I think you want the answer key prior to the test.

let me know when you get a real job

can I get change? wrote:

Limousine Libertarian wrote:

For starters, don't enact a minimum wage law that will put them out of work and increase the rent and cost of living in their area.

All this trickle down bull crap has already been clearly blown out of the water. People aren't falling for that hokey nonsense anymore. The US got insanely rich. It didn't trickle down. Most Americans hardly improved financially in the last few decades of unprecedented wealth. That's actual evidence and proof...beats out hackneyed capitalist-apologist theory everytime.

There's no such thing as "trickle down economics." That's a straw man invented by progressive journalists who don't understand and don't want to debate real economics.

"Minimum wage" jobs have been paying $10-$12 for a while now in my area because the economy was strong (discounting pandemic lockdowns). The problem comes when the economy tanks which it will do in the next couple years. At that point businesses will go back to paying as low as 7.25/ hour which EVERYBODY knows is far below enough money to live on. What happens is these people are being subsidized by the gov't. and the incentive to work for such a low wage is minimized.

A LOGICAL raise to the minimum wage would be to $10.

If a business can't pay this wage to their employees and make money, then they shouldn't be in business anyway and should find a way to run their business better.

Another point is that business's HAVE to have a certain amount of labor to operate. Are they just paying extra people right now that aren't productive? I doubt it. Therefore, if they lay off workers, their business will be inefficient and they will lose customers because of poor service.

That business will go to a better run business and they will hire any workers not working for the inefficient business.

What I am proposing is that the minimum wage is basically what businesses MUST pay to get workers when the economy is good. That would seem to me to be the best way to set a fair amount to pay at all times.

The last point is that businesses will NOT have to raise their prices because THEY ARE ALREADY PAYING THEIR MINIMUM WAGE WORKERS A DECENT WAGE.

If you haven't been paying attention, prices at restaurants and other minimum wage businesses have ALREADY BEEN GOING UP even though the federal minimum wage has not moved in over 10 years.

can I get change? wrote:

let me know when you get a real job

Shouldn't you be studying, rather than surfing the net?

Limousine Libertarian wrote:

principles of economics wrote:

Symbiotic relationship in which both benefit.

Incorrect. Capital investment is the horse driving the cart.

But if you have only horses you have a problem.

You can invest as much as you want in the best thing, but if nobody buys it because nobody has disposable income, your genius product will fail.

But hey, that is exactly the point where the US is today. Most people are living on the edge and have no idea how to pay the rent next month but Elon Musk is now the richest man on the planet (if that is true).

Low wages is a cul de sac.

samesame wrote:

That’s why you can’t find any case histories where a state increased minimum wage and the economy contracted.

Venezuela.

You decided to go back 100 years when U.S. corporate manufactures started outsourcing. That did not create instability in U.S. equity markets. If outsourcing labor created economic collapse, you would have addressed call centers over the past 40 years in Asia. Call center issue have not cause U.S. recessions.

U.S. equity markets pre-Security Exchange Commission:

1) Short selling was allowed sans uptick rule

2) No rule 144 for insider trading

3) Broker-Dealers were lightly regulated or mostly unregulated

4) No rule separating commercial banks from investment banks

5) Graft and corruption in equity markets were rampant.

6) The aggregate budget today for S.E.C., N.Y.S.E., N.A.S.D. & C.F.T.C. is much greater than Nuclear Regulatory Commission.

7) The world came out of a global recession in mid-1920s. When markets rise too quickly, a correction will occur.

I could list 100s of reason why markets fell, 1920s. Outsourcing, not one of them.

Why is it popular? Because every decent person would like his countrymen to be able to live comfortably in exchange for their labor. Whether a minimum wage increase will lead to that end is another question. History seems to indicate otherwise. Nothing humankind has tried to date has come close to eradicating poverty.

Limousine Libertarian wrote:

samesame wrote:

That’s why you can’t find any case histories where a state increased minimum wage and the economy contracted.

Venezuela.

That's your explanation for what happened in Venezuela?

Mr being logical wrote:

If a business can't pay this wage to their employees and make money, then they shouldn't be in business anyway and should find a way to run their business better.

If you believe a company "shouldn't be in business," then try one of these:

1. Don't work for them

2. Don't patronize them

3. Find a way to run YOUR business better and beat them

It's called a market.

principles of economics wrote:

Limousine Libertarian wrote:

Venezuela.

That's your explanation for what happened in Venezuela?

The burden of proof is on the minimum wage supporters to explain why raising the minimum wage in Venezuela a dozen times caused more inflation and didn't lift them out of poverty.