I was talking with a coworker the other day and they were talking about how raising minimum wage causes inflation because businesses will raise prices to offset to rise in labor costs. I asked if he thought inflation had gotten bad in the past 5ish years in particular. He said of course. I said well federal minimum wage hasn’t risen since 2009, which was 15 years ago, so it sounds like inflation is gonna happen regardless of wages and is based on the capitalistic goal of infinite growth, so maybe we should raise minimum wage so lower income people have a shot at affording basic necessities.
He just said no, then inflation just would’ve been worse. It’s maddening.
The response to this is that inflation is a market force working against the downward pressure of demand. There is a limit to the amount prices can go up before people stop buying altogether.
Another inflationary force is greed, funneling additional profits into the pockets of the 0.1%.
Let the inflation due to minimum wage be X, and the inflation due to greed be Y, and the maximum total inflation be Z. X+Y=Z
Of course there are other variables, but in a general sense, if X goes up, Y must go down. If X does not go up, Y does.
So yes there will be inflation, but increasing wages takes more money from the ownership and puts it into the pockets of the bottom 99.9% where it will do far more good.
And in case it wasn’t clear, this is precisely why the oligarchy opposes increasing the minimum wage. It has nothing to do with inflation, and everything to do with they make less money.
Except that they have studies that prove that they make more money when they increase wages. Tons of em since the '70s have shown that putting more money in the hands of the poor just means that the rich get to skim off even more money. They oppose thriving wages because they want suffering.
It really is absurd… It’s like basic fucking logic… You have more money, so you have more money to SPEND. Who benefits from more spending? Those that own the things we’re buying!
But no… I need more more more more and fuck you for wanting a normal life. Daddy needs another private island. Git Gud suckers, just be a CEO!
You’re confusing a rising tide with a water hose. We absolutely know that increasing wages is good for the economy, but that helps everyone. Oligarchs benefit financially from poverty, even if the economy suffers. As you said, they want suffering, because it allows them to exploit people. Capitalism is the idea that one with means can leverage their position to capture disproportionate value from effort of others. Don’t confuse capitalism with the economy. Capitalists always make money, and they don’t necessarily make more money when the economy is thriving.
There is a limit to the amount prices can go up before people stop buying altogether.
Not when those items are necessities, like food. Damn us poor people and our need to…checks notes…eat.
McDonald’s is not a necessity. The price went up for one reason only: people will pay it. Is it that hard to make a hamburger or go to a basic deli? You can get a better sandwich and drink at the supermarket.
Honestly, I think there’s 2 ways to think through this. Way 1: Magically the minimum wage is increased, and everything about the legislators stays the same.
This would increase inflation, as what’s causing inflation is the lack of legislation and enforcement. Thus allowing companies to raise prices and profits unchecked.
Way 2: The legislators change in such a way that it’s logical and possible to raise the minimum wage. Also logically other legislation would be passed to reduce the unchecked greed.
This would not increase inflation on it’s own, and likely would keep it to a healthy minimum.
I think most who complain about the minimum wage talks can only imagine the first way.
To be fair states, and even cities have their own minimum wage too, and those have gone up. Federal minimum wage is just the base line.
That’s true, but the baseline should be able to afford food and housing somewhere. Currently it affords that precisely nowhere. As a result, multigenerational homes are becoming more prevalent, children are working to help support households more, and single income families are nigh extinct. My wife and I are DINKs in a 2 bedroom apartment because the cost of houses is absolutely insane here. It’s hard find even a fucking townhouse for less than $500k lol. Most single family homes are at least $700k. At this rate, we’ll see polyamory and polygamy become more accepted because it’s gonna get to a point where only working throuples can afford shit anymore.
This is something that I actually interesting culturally. Here in the US multi generational family homes are essentially considered a bad thing, but down in Costa Rica where my family is Multi generational homes are maybe not a goal per se, but something expected as your parents age, or as your kids grow up. You’ll grow up, move out for school, to get a job, and as you get older you’ll try to stick next to your family, and eventually your parents move back in so you can take care of them.
Obviously doing this out of necessity is bad, but a fun culture difference to observe.