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Unless the 20 cents/burger is delivered by a magical unicorn, then the 20 cents certainly DID come off of some other consumption. You should read up on the broken window fallacy, this time for comprehension.
We would not be better off, we merely would have substituted what we really preferred to spend money on so we could overpay a fry cook, because the government dictated it.
I say tax the wealthy at 90% on any income in excess of the national average income. This would incentivize the wealthy to insure everyone makes more, even if only to releive their own tax burden.
Hardly. That would only make more people offshore their money or invest it in pre tax retirement accounts. You'd also see more people being compensated in other ways, company cars, housing stipends, etc to keep their salary down but compensation up. You'd also seem more people donating to non-profits, people would rather see their money go to something they support rather than into the big government black hole.
Let me guess, you make less than the national average.
Here are jobs that currently pay about $15 / hour
http://www.indeed.com/q-Pay-$30,000-jobs.html
http://www.indeed.com/q-$30,000-jobs.html
Do these look like minimum wage jobs to you? How much do you think all of these jobs would increase to if the minimum wage was $15 / hour? They're certainly not going to remain the same and are surely going to go up and retain a similar difference from the fry cook, who would also go up, and minimum wage. If everyone gets another $7 / hour inflation WILL catch up and the unskilled workers making minimum still won't be able to afford a house with a white picket fence.
Here are jobs that currently pay about $15 / hour
http://www.indeed.com/q-Pay-$30,000-jobs.html
http://www.indeed.com/q-$30,000-jobs.html
Do these look like minimum wage jobs to you? How much do you think all of these jobs would increase to if the minimum wage was $15 / hour? They're certainly not going to remain the same and are surely going to go up and retain a similar difference from the fry cook, who would also go up, and minimum wage. If everyone gets another $7 / hour inflation WILL catch up and the unskilled workers making minimum still won't be able to afford a house with a white picket fence.
Interesting, guess many right wingers think those fry cooks are making too much and should be making less than minimum wage. Also, doesn't Denny's have a $3 breakfast or something? You are aware that any minimum wage wouldn't go up overnight? Whenever an increase happens, it is done on stages, and in reality, it should be going up by small amounts each year like other states that have their minimum wage tied to inflation.
Unless the 20 cents/burger is delivered by a magical unicorn, then the 20 cents certainly DID come off of some other consumption.
The burger flipper went from being able to buy two burgers to being able to buy 2.38 burgers pre hour of work. All the burger flippers all across the economy just had more extra money to spend. This means the economy expanded. The increase in consumption exceeded the increase in cost of labor.
Quote:
Originally Posted by marcopolo
You should read up on the broken window fallacy, this time for comprehension.
I understand the fallacy. The economy of the US was driven in a large part by that fallacy just after WWII.
Quote:
Originally Posted by marcopolo
We would not be better off, we merely would have substituted what we really preferred to spend money on so we could overpay a fry cook, because the government dictated it.
I think what you said isn't quite what you mean. Ronald Reagan gave the rich a tax brake. They went from paying taxes to loaning the government the difference between what their taxes were and what they became. They expected to get their former tax money back with interest. Your argument has the flavor of this. What people with a lot of money want to spend their money on is something that will get them their money back with interest. So to spend the money on wages instead of an investment opportunity looks like a cost to them. But is it truly a cost? The burger flipper went from being able to buy 2 burgers per hour to being able to buy 2.38 burgers per hour. This means the economy is going to grow.
The flip side of the argument is this.
If you take a job that paid $20 an hour and move it to a labor pool that pays $1 a day then the world's economy contracts by just about the $20 an hour. But the debt leveraged against the income remains. That $20 per hour isn't being spent. The debt leveraged against the income remains. This is the broken window. The income is gone but the debt leveraged against it remains.
If you coupled a $1,000,000 hr. wage with enough newly printed money so that the current employees could keep spending and the current employers could write pay checks it wouldn't shut things down.
Tell me how does a small business come up with $1,000,000 worth of cash to fund one hour of labor?
Quote:
Originally Posted by ContrarianEcon
Too much investment and not enough consumption. We need less investment and more wages. We have a miss allocation of resources. This is world wide not just in the US.
You really need to study the broken window fallacy because I do not think you understand it.
Quote:
The parable, also known as the broken window fallacy or glazier's fallacy, seeks to show how opportunity costs, as well as the law of unintended consequences, affect economic activity in ways that are "unseen" or ignored.
First, you ignore the inability of some business being unable to afford the new cost of labor. Second, you ignored the fact that some businesses will not get an increase or enough of an increase to offset the increase cost. Third, you ignore that some business will not have access to the new paper you are printing.
I say tax the wealthy at 90% on any income in excess of the national average income. This would incentivize the wealthy to insure everyone makes more, even if only to releive their own tax burden.
New business, products and innovation will be severally decreased. Home ownership would likely dry up too due to the inability of rich developers to invest in building houses.
Interesting, guess many right wingers think those fry cooks are making too much and should be making less than minimum wage.
Care to support this absurd assumption. Seems you are back to playing liberal tool with stupidity such as this.
Quote:
Originally Posted by urbanlife78
Whenever an increase happens, it is done on stages, and in reality, it should be going up by small amounts each year like other states that have their minimum wage tied to inflation.
I would ask if you cared to support this but we'd get to the same part where you refuse to discuss the significant flaws when basing wages on purchasing power.
Why do you think any humans labor worth is less than $10.00?
Because we live in the real world?
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