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In a hypothetical situation where they did raise minimum wage to $22, or somewhere thereabouts, I wonder if that would aggravate the immigration issue, whether it be illegal, or legal? I would venture to guess that with the potential for someone to garner that sort of wage, the impetus to get here would increase dramatically. I realize that there is no way that amount of increase is feasible, but I thought it might be an interesting twist on the whole thing.
Its astonishing really to see all this market high mindedness with wages when all the talk is really nothing other than a wage Bernanke. I put the picture so that we my behold the wonderfulness of it all.
Just remember that any wage increase that does not increase productivity or add value is inflationary. Inflation is just a hidden tax on earnings. What good to get $22 per hour if a hamburger cost $22? A car $75K? All you do is handle more money
Why would it cause monetary inflation? If you had $100 and you paid me to mow your lawn for $10, I'd have $10 and you would have $90. If there were a law that you must pay me $20 then you would have $80 and I would have $20.
It would sure get workers to get out and start spending again on new cars, appliances, vacations, and college education for the kids. Do you think big corporate employers will be excited about this new idea? Just think what will happen when the all of the corporate conglomerate low level employee's can actually buy in abundance what they sell! Do you think corporate shareholders will like this idea?
In the interest of fairness, I think raising the minimum wage to at least $12.50 an hour is a good first step. However, I must admit that I have concerns about whether or not such a huge increase may trigger runaway inflation, such as we saw in the 1970s and 1980s.
Perhaps a more gradual series of increases over 3 to 5 years would have a less volatile effect on the economy and would prove more prudent. Future increases could then be tied to subsequent rises in the consumer price index (CPI).
Why would it cause monetary inflation? If you had $100 and you paid me to mow your lawn for $10, I'd have $10 and you would have $90. If there were a law that you must pay me $20 then you would have $80 and I would have $20.
$90 + $10 = $100
$80 + $20 = $100
Where is all this money coming from?
Your example is too narrowly focused and you should know it. No one has $100 set aside for a person to mow the lawn. The choice a real human being would make is whether to take $10 set aside for something else and use it for lawn care. They might choose not to do that. The lawn mower would have lost a job.
If Burger King's payroll costs doubled, it is absolutely certain their food prices would go up. If a grocery store, which probably operates at a 3% profit margin, has to pay its baggers double what they make today, they will either raise prices or get rid of the baggers.
Your example is too narrowly focused and you should know it. No one has $100 set aside for a person to mow the lawn. The choice a real human being would make is whether to take $10 set aside for something else and use it for lawn care. They might choose not to do that. The lawn mower would have lost a job.
The point is the money creation must be sourced to cause inflation.
Quote:
If Burger King's payroll costs doubled, it is absolutely certain their food prices would go up. If a grocery store, which probably operates at a 3% profit margin, has to pay its baggers double what they make today, they will either raise prices or get rid of the baggers.
And in a perfectly stable money supply the price of everything else not dependent on minimum wage labor must fall.
To have inflation, savings must go down, velocity up , or money must be created.
It amazes me that middle class people, and my educated take on CDF members seem to be better educated than average people, can become so terribly concerned about minimum wage workers earning a decent compensation for their labor, but CEOs regularly give themselves outrageous bonuses and earn obscene amounts of money.
I hope that if the McD cashier with a high school diploma starts making $22/hour, my research science job starts paying me $90.
If you feel that way than you are useless at your job...a very important and vital job I might add.
Do society a favor and quit so someone who cares can take your spot.
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