Raising the minimum wage is part of the Democrats platform

[erowe1]

No. You have not shown where they claim: some prices go up/some prices go down due to minimum wage.

In everything I've said I've been presupposing a certain facility with the laws of logic and mathematics on the part of my readers.

Please try to follow this.

Either an increase in all prices across the board is always caused by an increase in the money supply or it is not. Williams, Hazlitt, and Friedman all say it is in the links I provided.

If an increase in all prices across the board is always caused by an increase in the money supply, then it is never caused by something that does not increase the money supply, such as price controls. Hazlitt says this explicitly in his third point in the link I provided.

Price floors, such as the minimum wage, do cause an increase in the prices of some things by definition. On this we all agree.

Since price floors cause the prices of some things to increase, while they do not cause the prices of all things across the board to increase (which would be the case if all other prices either stayed the same or increased), then it follows that while those prices increase at least some others must decrease.

If all other prices either stay the same or increase while the minimum wage increases, then that would mean an across-the-board increase in prices, which cannot happen without an increase in the money supply.

 

[erowe1]

Yes, you're talking about how if some prices go up, some others have to go down.

Only if the money supply stays constant.

If the money supply increases, then prices can and will increase across the board.

As I've said, raising the minimum wage increases some prices. But it does not increase prices across the board. You repeatedly try to refute this by claiming that raising the minimum wage raises some prices, which doesn't refute me, since that's exactly what I'm saying. It just doesn't raise all prices, and you've really provided no arguments this whole time that it does.

 

[The Free Hornet]

If all other prices either stay the same or increase while the minimum wage increases, then that would mean an across-the-board increase in prices, which cannot happen without an increase in the money supply.

Prices can go up because consumption goes down. There is no corresponding decrease in prices that follows (especially long term). If long-term inflation is unaffected it is because the people dropped from the economy cease to matter in these regards.

The damage of the misregulation is routed around and the affected cease to matter.

Your pay goes from $10/hr to ZERO! But don't confuse that with a price decrease even if the person who hired your now worthless ass is saving money.

If there were a price decrease it would be on the black market. So the cost of hand jobs might decrease as the number of available hands increases.

 

[TheGrinch]

Only if the money supply stays constant.

If the money supply increases, then prices can and will increase across the board.

As I've said, raising the minimum wage increases some prices. But it does not increase prices across the board. You repeatedly try to refute this by claiming that raising the minimum wage raises some prices, which doesn't refute me, since that's exactly what I'm saying. It just doesn't raise all prices, and you've really provided no arguments this whole time that it does.

That's because I'm not arguing that it will necessarily raise all prices, there are 3 possibilities there. But no, again, the raising of some prices does not necessarily have to lead to lower prices elsewhere. That's jsut not true, especially when you artificially raise wages.

Anyways, I really am done this time. You do a nice job of playing devil's advocate, but your argument is flawed and ever-evolving towards us arguing the same thing, so I'll save us some time.

 

[erowe1]

Prices can go up because consumption goes down. There is no corresponding decrease in prices that follows (especially long term). If long-term inflation is unaffected it is because the people dropped from the economy cease to matter in these regards.

How does a person "drop from the economy"? You mean they die?

And when you say "prices can go up" are you talking about some prices or all prices? If you mean some prices, then that's no different than anything I've said. If you mean all prices, then you're going directly against the economists I referred to, which is the point I was making by referring to them.

 

[erowe1]

That's because I'm not arguing that it will necessarily raise all prices, there are 3 possibilities there. But no, again, the raising of some prices does not necessarily have to lead to lower prices elsewhere.

Raising some prices does not necessarily have to lead to lower prices elsewhere. It only has to lead to that if the money supply is kept constant. If the money supply increases, then prices overall across the board can increase. But if it does not, then they cannot.

Let's say there are 3 products: A, B, and C. Their prices are as follows: A=$1, B=$2, C=$3. The price of a basket of A+B+C=$6.

If the price of A goes up to $2, and the prices of B and C stay the same, then the price of that basket will be $7. In other words, overall prices across the board will have gone up. In order for this to happen, there must be inflation, i.e. an increase in the money supply.

If there is no inflation, and the price of A goes up to $2, then that means that overall prices across the board stay the same, and the basket of A+B+C must remain at $6. Thus the prices of B and/or C must go down.

If this is not the case, then neither is it the case that inflation is always and everywhere a monetary phenomenon.

 

[The Free Hornet]

How does a person "drop from the economy"? You mean they die?

Yes... eventually.
www.worldlifeexpectancy.com/unemployment-reduces-life-expectancy

This isn't a game of "some goes up/some goes down". It isn't zero-sum either. It is harm to the most vulnerable segments of the economy ("They always do harm." -Hazlitt). People also migrate away or become dependents on their family/friends. It would be little added marginal cost for someone to live with me especially if I have no responsibility for their health or education. Eventually, it is likely that dependency will be harmful to their life.

And when you say "prices can go up" are you talking about some prices or all prices? If you mean some prices, then that's no different than anything I've said. If you mean all prices, then you're going directly against the economists I referred to, which is the point I was making by referring to them.

Inflation is not about "all" prices. It is the overall trend. Even with inflation, all prices will NOT go up because of bumper crops or an unforeseen drop in the demand of beanie babies. Consider even hyperinflation. Will you buy wallpaper at any price when you are trying feed your family? Will the wallpaper guy sell a truck of wallpaper for a loaf of bread? Money isn't the only that can become worth less/worthless. Some prices will always go down regardless of whatever the fuck happens anywhere.

You jumped from "It causes some prices to go up, but then other prices have to go down" to a general discussion of inflation and monetary supply. It was a mistake and I don't think Friedman or anybody else can correct it.

 

[QueenB4Liberty]

It's unfortunate when a good many jobs out there now are minimum wage jobs, even for people that have many skills. You can barely afford a one bedroom apartment working a minimum wage job 40 hours a week, and a lot of minimum wage jobs are not full time. The last time it was raised was in 2009, and that was only by 75 cents. I mean, I think prices are rising without the minimum wage rising, but many people right now are forced to work minimum wage jobs, so they aren't able to afford the things they need. I just don't see why it hasn't been at least rising with inflation so people can at least attempt to make a living off of it. I realize it isn't supposed to be the type of job a grown adult supporting a family is supposed to have long term, but these are bad economic times and some people have no other choice right now.

 

[angelatc]

It's unfortunate when a good many jobs out there now are minimum wage jobs, even for people that have many skills. You can barely afford a one bedroom apartment working a minimum wage job 40 hours a week, and a lot of minimum wage jobs are not full time. The last time it was raised was in 2009, and that was only by 75 cents. I mean, I think prices are rising without the minimum wage rising, but many people right now are forced to work minimum wage jobs, so they aren't able to afford the things they need. I just don't see why it hasn't been at least rising with inflation so people can at least attempt to make a living off of it. I realize it isn't supposed to be the type of job a grown adult supporting a family is supposed to have long term, but these are bad economic times and some people have no other choice right now.

Pfffft. Nobody owes you an apartment you can afford, or a living, for that matter. If the minimum wage were abolished, unemployment would much lower. More people could start businesses, and as the demand for labor increased, wages would rise.

Economics 101: Price floors create surpluses. Minimum wage is a price floor, which is why we have a labor surplus.

 

[QueenB4Liberty]

If minimum wage were abolished, then you'd have employers try to get away with paying people as little as possible. I realize if no one wants to work for that price, the wages will rise, but some people would rather take anything and that would seem to keep labor down. I would rather people earn their money any day than get a check from the government. But most people if they had to choose would rather collect a welfare check than struggle trying to live off minimum wage. Raising the minimum wage isn't going to hurt me, I make 3x's that amount. Prices are going to keep going up whether or not minimum wage is raised.

 

[angelatc]

If minimum wage were abolished, then you'd have employers try to get away with paying people as little as possible. I realize if no one wants to work for that price, the wages will rise, but some people would rather take anything and that would seem to keep labor down. I would rather people earn their money any day than get a check from the government. But most people if they had to choose would rather collect a welfare check than struggle trying to live off minimum wage. Raising the minimum wage isn't going to hurt me, I make 3x's that amount. Prices are going to keep going up whether or not minimum wage is raised.

Of course business is going to do everything possible to keep costs low. Competition and specialized skill sets command higher wages. Merely breathing shouldn't.

Like you said, some people would rather take anything. Why shouldn't they be allowed to sell their labor at the true market rate?

The answer is to phase out federal assistance programs, not raise minimum wage.

If it were not for the minimum wag laws, I'd hire someone to work with me. But I can't afford to pay someone $7.25 an hour, plus the taxes the government tacks on. So instead of being able to hire a cheap high school kid with no bills, looking for gas money, or a retiree looking to get out of the house, I have a huge backlog of work and no legal way to hire an assistant.

 

[TheGrinch]

If minimum wage were abolished, then you'd have employers try to get away with paying people as little as possible. I realize if no one wants to work for that price, the wages will rise, but some people would rather take anything and that would seem to keep labor down. I would rather people earn their money any day than get a check from the government. But most people if they had to choose would rather collect a welfare check than struggle trying to live off minimum wage. Raising the minimum wage isn't going to hurt me, I make 3x's that amount. Prices are going to keep going up whether or not minimum wage is raised.

If the bolded were the case, then most everyone would only be making minimum wage now. The reason it is not the case is because companies have to compete for more skilled labor which can make them more money than lesser skilled/productive/reliable/credible, etc. from their labor.

Sure you can decide to only pay someone $5 an hour, but you'll probably only get crackheads and teenagers who will work for that wage given the current inflation. You're neglecting the fact that supply and demand also exists on the employment side, where the employee can dictate what wage they're willing to work for, to a certain extent. By raising the minimum wage, you are only ensuring that more skilled workers will enter the employment market at that wage, while those you're claiming to help, the underskilled/undereducated poor are disproportionate affected, finding themselves more often unemployed at that wage where it's simply not worth a company to take a chance and risk turnover, effeciency and other costs to take a chance on them.

I've taken two seperate internships where I didn't take a dime to work for companies, so that I could gain skills and employment down the road.... I think you're greatly overestimating the number of minimum wage jobs, as it is a very low percentage of entry level jobs. However, by taking that entry-level job, then much like my internship, you will gain marketable skills to gain better employment down the road... However, if you're underskilled and no one will employ you for a higher wage, then you are never going to gain the skills needed to gain meaningful employment down the road.

Also, MW is usually in response to inflation, but it certainly doesn't do anything to make the prices go down, and only to stay high and go higher in many cases.

 

[BSU kid]

Isn't raising the minimum wage essentially inflation? The cost of goods and services will go up along with the minimum wage, and negate any positive effects...clearly this is all propaganda meant to brainwash people hungry for their government intervention and welfare.

 

[TheGrinch]

Isn't raising the minimum wage essentially inflation? The cost of goods and services will go up along with the minimum wage, and negate any positive effects...clearly this is all propaganda meant to brainwash people hungry for their government intervention and welfare.

Oh lord, please don't start erowe again. I finally had him calmed down for his nap

 

[TheGrinch]

If minimum wage were abolished, then you'd have employers try to get away with paying people as little as possible. I realize if no one wants to work for that price, the wages will rise, but some people would rather take anything and that would seem to keep labor down. I would rather people earn their money any day than get a check from the government. But most people if they had to choose would rather collect a welfare check than struggle trying to live off minimum wage. Raising the minimum wage isn't going to hurt me, I make 3x's that amount. Prices are going to keep going up whether or not minimum wage is raised.

One more thing that should be noted, is that something is always better than nothing, or they wouldn't work for that wage.

People seem to assume that companies can just set whatever low wage they want. If they do that, then there will always be competition willing to pay more for better employees, which is exactly how a free market should work.

 

[twomp]

So I have a question because I sort of agree with both you guys and I am no where as knowledgeable.

Let's give my scenario. I am the Federal Reserve and I currently have 100 dollars in circulation. The minimum wage was just raised from 1 dollar to 2 dollars. How will it be possible to increase the pay of everyone in my country AND have an increase in prices WITHOUT prices dropping down somewhere AND WITHOUT printing more money?

 

[QueenB4Liberty]

Of course business is going to do everything possible to keep costs low. Competition and specialized skill sets command higher wages. Merely breathing shouldn't.

Like you said, some people would rather take anything. Why shouldn't they be allowed to sell their labor at the true market rate?

The answer is to phase out federal assistance programs, not raise minimum wage.

If it were not for the minimum wag laws, I'd hire someone to work with me. But I can't afford to pay someone $7.25 an hour, plus the taxes the government tacks on. So instead of being able to hire a cheap high school kid with no bills, looking for gas money, or a retiree looking to get out of the house, I have a huge backlog of work and no legal way to hire an assistant.

Yes I realize that we should phase out federal assistance programs, but they aren't going anywhere any time soon. Prices are going to keep rising anyhow, I make 3x the minimum wage, I don't care if they want to raise the minimum wage. I think if you want to work you should be able to afford to live on your own, I'm not talking about a nice apartment or anything, but I don't see a problem with wanting working people to be able to make it on their own. I just don't see why wanting the minimum wage to at least keep up with inflation is a bad thing, especially if it isn't going to cause prices to raise anymore than they already are rising.

 

[tttppp]

In my personal experience with the minimum wage, I was once looking for part time work in San Francisco which had a higher minimum wage. I was glad the minimum pay was a little more, but then I thought back at how hard it was for me to even get a minimum wage job. I had to apply to dozens andd dozens of places just to get minimum pay, even though I had a really good resume. It shouldn't be that difficult to get a low paying job.

 

[erowe1]

So I have a question because I sort of agree with both you guys and I am no where as knowledgeable.

Let's give my scenario. I am the Federal Reserve and I currently have 100 dollars in circulation. The minimum wage was just raised from 1 dollar to 2 dollars. How will it be possible to increase the pay of everyone in my country AND have an increase in prices WITHOUT prices dropping down somewhere AND WITHOUT printing more money?

It's not. Welcome to Austrian economics.

 

[QueenB4Liberty]

It's not. Welcome to Austrian economics.

k well what should we do when the rest of the world doesn't operate according to Austrian economics. I'm not disagreeing that Austrian economics is the way to go, I'm just being a realist.