The Case Against Raising Minimum Wage: Why Inflation Is the Real Problem

Well, more importantly, it would mean that we would have trouble paying off our $17T and growing national debt if there was no inflation to offset the opportunity cost of debt service.

I have some ideas that everybody would hate that would be multipurpose in this regards. One of them would be a $10 per square foot federal excise tax on all housing units over 1500 square feet/unit at the time of construction and at the time of conveyance for value. Want a 2K square foot home, you gotta pay a 5K tax for the extra 500 square feet. Earmark those funds to additional debt reduction. It would both help to contain debt, discourage waste, lower electrical demands, create more housing stock in the affordable price points, and contain cost of living for the middle class and poor.

 

If a small business is competent, then an increase in the minimum wage will increase the number of their customers and their sales. That will make up for the higher wages they pay in various ways.

 

Or, the tax money could be used to expand the economy, which would also make it easier to pay the interest on the debt and, done right, would increase the incomes of the poor and middle class.

 

I like this idea but I think it should take into consideration the amount of people living there. Like a 2000SQFT place would be alright for a large family.

 

That is fine. The thing is as our families are getting smaller, our houses are getting bigger, so we need to contain that some IMO.

 

You left ugh out of liberal "thot".

 

I don't want to increase incomes--I want to lower costs of living. The purchasing power of a dollar is too out of control in some places. The disparity is glaring.

 

So what happens to the poor if your country has 14% inflation per year like the U.S. did in the early 80s? Their incomes decrease by 14% until it goes back up again. Totally unacceptable.

No it isn't, you made that up.

 

No they don't, that's left-wing propaganda designed to make it look like there's some meaningful difference between the two parties. Neither party wants to abolish minimum wage, but neither party wants to raise it either.

 

So you think those 1-1 mill poor workers forced out of jobs need to take one for the team so that those higher skilled jobs can be created? I gotta hand it to you, this is one of the first times I've ever seen a left-wing statist come straight out and admit that he supports legislation that benefits the richer income groups at the expense of the poor. At least you're honest.

Using the monetary system to benefit those in debt and harm those with savings for your own political game is not the solution. Taking away half a million poor people's jobs and then sticking it to them again with higher prices is a slap in the face. But (*)(*)(*)(*)' em, right?

 

Interesting- so the value of savings that are not actively employed are destroyed. Makes sense...

 

Yeah, let's just finish the job and kill those small businesses. What a great world it will be when we only have large monopolized corporations!

 

You thought wrong. Inflation is caused entirely by the size of the money supply changing at a higher rate than the size of the economy changes. Growth does not result in inflation, and nominal wages don't have to go up in order for real wages to go up. In fact, real prices go down in a healthy economy, while real wages and real output go up. You are demonstrating a fundamental misunderstanding of basic economics.

Only temporarily until inflation chews up their income again, then you're right back where you started. Growth is good for everybody, it's just a question of how equitably the gains are distributed. Forcing the rich to distribute their wealth back down to the poor fundamentally ignores the problem of how the wealth gap got to be so uneven in the first place. Government solutions to government problems is not going to solve anything.

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Bad news bro, the rich are the ones who create inflation. It benefits them at the expense of the poor.

 

Raising wages does not cause inflation at all, period. The only thing that causes inflation is when the rate of change of the money supply is greater than the rate of change of the size of the economy.

I agree with you that what businesses are willing to pay employees is not set by a free market because we don't have a free market. I was speaking hypothetically of a free market. The fact that we have too big to fail corporations colluding with each other is a separate issue that I don't feel like getting into. The point is that on average, engineers make X times the amount of minimum wage workers. Simply passing a law that raises how much minimum wage workers make isn't going to change the fact that the laws of supply and demand dictate that engineers will make an average of X amount of times the minimum wage.

Please provide sources to support your claims.

And I already addressed this issue above - that is not what causes inflation at all. When you understand the true cause of inflation, it punches a hole in your theory.

Then write a letter to your Congressmen and tell them to support implementing Milton Friedman's Negative Income Tax system.

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No it wouldn't. It would be very good for the U.S.

 

You have your causation backwards. If there was no growth, then no money would be injected into the economy. But if the economy was growing, you have to inject money into the economy in order to maintain stable prices.

We've seen what 2% inflation does to the poor after a few years. Totally unacceptable, unless you think the poor need to make sacrifices supposedly for the "good" of the economy. (*)(*)(*)(*) 'em, right?

 

I think those 1-1 mill should wake up and do something with their lives. If your young and looking for EXP, volunteer at a food shelf, organize a fundraiser, do some work for americore. If you are a 35 something and blow so bad at making Big Mac's that your out a job when policy starts matching reality then its time for an upgrade of skills.

Go to school, go to the library, level up your game. I am currently working IT because I went online and learned how to troubleshoot. When I learn a bit more I'll have a start in my career. Its hard. VERY HARD!
But since I don't support policy that drags the nation down (a patriot who loves this country) for those who can't find their own way. I'm willing to dig in and improve myself.

BTW I'm no left-wing statist, I just realize that things aren't working now and am not afraid to point out how they could be better. We need policy that embraces the new paradyme, and "race to the bottom" ain't gonna cut it anymore.

Oh, and monopolies can have been and will be broken up, as long as people stay involved and use the laws in the books to break them up monopolies won't be a problem.

 

Good point. That's an excellent reason to balance the budget.

Inflating the debt away just transfers purchasing power from bond holders to the government. The real way to pay down the debt is through real growth that can be taxed.

That's a great way to ensure that the middle class gets raped harder than it already is.

 

Sure, that's because the minimum wage increase will ensure that their smaller competitors get run out of business.

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Why do we "need" to contain that some?

 

Yeah, I mean it's tough for those who played it right and saved up, but IMO, we've really moved to more of an invester's economy. This way at least the availibilty of investment capital in the market will force loan rates to stay low, and hopefully enable people to pull out (legitimately) cheap loans for home and school.

 

They already were doing something with their lives before you forced your morals on them to put them out of a job. Maybe they were happy flipping burgers at McDonald's. That's not your place to decide. And to tell the unemployed that they should wake up and do something with their lives is asinine. You're basically telling them to stop being lazy and go get a job. That doesn't work. It never has and never will.

A left-wing statist solution if I ever heard one. Once again, it ignores the fundamental problem of how those corporations got to be monopolized entities in the first place. Government solutions do not solve government-caused problems.

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That doesn't justify stealing people's savings just because you think it's good for the economy.

 

The only reason we don't have monopolies right now over everything is because of government intervention. Sorry to burst your bubble.

"Stop being lazy and get a job" is about the only thing that CAN work, other then wild welfare polusas. I mean, if people working at McD's made enough to get off of and not need welfare, we wouldn't be having this conversation, but your essentially saying "Don't change minimum wage, let them get feed by the state"

I'm sorry but that sort of asinine left wing statist ideology just isn't cutting mustard any more.

"Government solutions do not solve government-caused problems."

Uh... slavery? Legalized by the government, removed by the government.
Uh... prohibition? Instituted by the government removed by the government.
Uh... women's suffrage... you get the idea right?

Government can solve any problem it makes, and it can also solve problems caused by unscrupulous corperations and the out of touch rightwingers that follow them.

It takes honest assesments and the willingness to acknowledge that mindless ideology isn't going to solve anything.
It wouldn't be stealing anything. Just changing policy to reflect reality

 

Because we do--energy savings, land use, wasted resources, create affordable housing stock, curbing capital inflation, punish people who live in big houses. Take your pick.