Prices are up in recent years. With that in mind, shouldn't we consider raising the minimum wage? It's obvious that higher prices require the average wage to rise. Tax revenues would also rise leading to a shrinking of the budget deficit. Win, win!
No, the free market will dictate lower prices sooner or later if we leave it alone. Increasing minimum wages will result in lost jobs
Nothing about free market wants low wages and high prices, that’s insane. Nothing about COVID was free market. The things that caused prices to skyrocket was government intervention in supply chains of goods and services and money.
US adds whopping 517K jobs in January; unemployment at lowest rate since 1969 Janet Yellen now sees a chance the US economy will avoid a recession as inflation is coming down There are positive signs for the economy and inflation, but most Americans still support raising the minimum wage. ... three states in this country have $15-an-hour minimum wages. Most voters want that to change; 64 percent of Americans, about two-thirds, say, yes, it's time to raise the minimum wage. And let's look at younger Americans in particular. Look at that; 71 percent Gen Z, millennials. So, there, you're talking about 20-year-olds, 30-year-olds, roughly. They say, yes, let's raise the minimum wage. That was certainly the highest we saw for any generational group. But I want to say it's interesting. Across incomes, whether you make more or less than $50,000, two-thirds of Americans say, yes, raise the national minimum wage. [https://www.pbs.org/newshour/show/n...d-on-debt-ceiling-debate-raising-minimum-wage]
We've discussed this before. Higher wages result in a higher prices (if you're familiar with the Wage-Price Spiral theory in economics) but the price increase is usually less than the wage increase. So you raise wages, in response to that prices increase causing inflation and you have to raise wages a little bit more to keep up, but not as much as you did last time. To mathematically calculate the final result you need to use infinite sum series. I can provide a more concrete example of what that might look like. Let's say that for every $2 in wage increases it leads to $1 in price increases. If you start inflation off at 4%, then the additional inflation caused by wage increases would also be 4%, leading to a final 8% total inflation rate with an 8% increase in wages. (1/2 + 1/4 + 1/8 + 1/16 etc) times the original 4% will be the additional increase
You can do fancy maths, but something in the economy has changed. And it's not just COVID. I hear that globalization is basically on a downward slant now, and is possibly over. So we're entering a new economic era.
Of course I am sure that most of the Left will absolutely refuse to recognize this change had anything to do with inflation. Maybe a little bit of cognitive disconnect there.
