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Economic theory is clear: raising the minimum wage has the following effects:
The total number of low-end jobs decreases, as the minimum wage is above the market clearing wage.
Many formerly employed low-end employees lose their jobs.
Many hope-to-be employed low-end employees enter the job market for the now-higher wage only to find no one will hire them.
Those low-end employees who keep their jobs will have larger paychecks.
Prices at the margin go up
Huh? Economic theory is not clear by any means on this topic. Economists have different views and there is no consensus. Some say raising the MW is contractionary, others say it is stimulative.
The experiment in raising the minimum wage has already been done. Here are the results:
California's minimum wage was $8.00 in 2013 while the unemployment rate was 8.4%
California's minimum wage is $12.00 now (going up to $13 in three days) and the unemployment rate is now 3.9%.
That's a 50% hike in wages in 6 years and during that time unemployment was cut by more than half.
This real world data proves that raising wages does not necessarily cause a loss of jobs.
As to your other point on inflation, there is moderate inflation but not enough to suggest a strong link to a 50% increase in minimum wage. Granted, there has been massive asset price inflation in real estate, but that's not due to minimum wages by any means. Those workers aren't buying houses.
In the current economy we have a surplus of excess capital at the top while at the bottom we have a shortage of aggregate demand caused by stagnant wages that haven't kept up with productivity. As MW is raised, workers have more money to spend, which increases demand, businesses see higher revenues and hire more employees to meet the demand. There is a limit to how high and how fast MW can be raised but we aren't there yet.
Why should we mandate a minimum wage when the cost of living varies so greatly from state to state and even from city to city within some states?
Minimum wages were never intended to be a "living wage" for a family... or even for an individual. Nevertheless, it is instructive to do some comparisons.
Would you rather be making $13/hour in California where the cost of a 1 BR apartment could be $3,000 per month (or HIGHER),
or would you rather be making $7.25/hour in Tennessee where a 1 BR apartment might cost you $700 per month?
The great recovery started before Trump took office.
If you recall the recession started before Obama took office. One of the reasons Obama was elected was that he was seen to have a steadier hand than McCain in September and October '08 as the economic storm clouds gathered.
If you recall the recession started before Obama took office. One of the reasons Obama was elected was that he was seen to have a steadier hand than McCain in September and October '08 as the economic storm clouds gathered.
Maybe that steadier hand was due to the pot that Obummer was smoking. That, coupled with the fact that being a "Community Organizer" is not generally considered to be a high pressure job.
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