Franchise group files to block [Seattle's] $15 minimum-wage phase-in

[PyramidHead]

Is everybody forgetting that increases in minimum wage are spent by workers? Might that have some effect on an economy driven partly by consumer activity?

 

[ksen]

Is everybody forgetting that increases in minimum wage are spent by workers? Might that have some effect on an economy driven partly by consumer activity?

Whoa, slow down komrade!

 

[coloradoatheist]

Is everybody forgetting that increases in minimum wage are spent by workers? Might that have some effect on an economy driven partly by consumer activity?

Yes, and will go into inflation. The issue is when does equilibrium catch up.

 

[Togo]

Is everybody forgetting that increases in minimum wage are spent by workers? Might that have some effect on an economy driven partly by consumer activity?

Yes, and will go into inflation. The issue is when does equilibrium catch up.

Why would moving cash from shareholder profits to low-income wage earners increase inflation?

 

[coloradoatheist]

Yes, and will go into inflation. The issue is when does equilibrium catch up.

Why would moving cash from shareholder profits to low-income wage earners increase inflation?

Minimum wage increase don't only come from shareholder profits. And as a response to increased costs to businesses, they raise prices to compensate. Rents and utilities go up in response to the increase too. It's a a cycle.

 

[Jayjay]

And in the Wal-Mart example you can compare how they do compared with another giant in that industry, Costco, which routinely pays their employees much better than Wal-Mart pays its employees.

Then why don't all Walmart employees just quit and go work for Costco?

 

[J842P]

Yes, and will go into inflation. The issue is when does equilibrium catch up.

Why would moving cash from shareholder profits to low-income wage earners increase inflation?

Presumably because wage-earners will spend that money and shareholders wont.

I don't really think that economics is a dismal science. The people who say that generally don't know anything about science other than what you might learn in high school or maybe an introductory level science class.

So, while economics isn't a dismal science, it is full of dismal scientists.

 

[ksen]

good question!

 

[Loren Pechtel]

Probably not and certainly not by the same %. No firm's costs consist entirely of MW labour, and for most it's a small fraction. You're now asserting that all firms put their prices up in unison by more than the increase in costs. It'd be a good argument for regulation if it wasn't laughable.

Yes, you can keep increasing the minimum wage to keep it ahead but you'll just be driving inflation up and hurting everyone.

Ahead of your supposed above-costs price hikes, you mean?

Workers who get more than MW do so because they are able to demand the higher wages. They're not going to accept now getting effectively less than they were, they'll demand and get similar increases.

They'll demand and get increases commensurate with price increases, which will be less than MW increases since MW labour is a typically small fraction of costs. Dollar MW increases will put cents on a typical household budget.

But those increases also show up as costs.

By the time the system has returned to equilibrium all you will have is inflation, nobody's standard of living will be increased.

- - - Updated - - -

And in the Wal-Mart example you can compare how they do compared with another giant in that industry, Costco, which routinely pays their employees much better than Wal-Mart pays its employees.

Costco and Walmart are hardly in the same market.

 

[Nice Squirrel]

Is everybody forgetting that increases in minimum wage are spent by workers? Might that have some effect on an economy driven partly by consumer activity?

That's crazy talk.

 

[ksen]

And in the Wal-Mart example you can compare how they do compared with another giant in that industry, Costco, which routinely pays their employees much better than Wal-Mart pays its employees.

Costco and Walmart are hardly in the same market.

lol, ok.

 

[Canard DuJour]

Probably not and certainly not by the same %. No firm's costs consist entirely of MW labour, and for most it's a small fraction. You're now asserting that all firms put their prices up in unison by more than the increase in costs. It'd be a good argument for regulation if it wasn't laughable.

Yes, you can keep increasing the minimum wage to keep it ahead but you'll just be driving inflation up and hurting everyone.

Ahead of your supposed above-costs price hikes, you mean?

Workers who get more than MW do so because they are able to demand the higher wages. They're not going to accept now getting effectively less than they were, they'll demand and get similar increases.

They'll demand and get increases commensurate with price increases, which will be less than MW increases since MW labour is a typically small fraction of costs. Dollar MW increases will put cents on a typical household budget.

But those increases also show up as costs.

I'm not saying they won't. But they'll be a fraction of the MW increase - cents on the dollar.

By the time the system has returned to equilibrium all you will have is inflation, nobody's standard of living will be increased.

They will. Even if every cent of increased cost were passed directly to consumers, there'd be a downward redistribution with gains concentrated at the bottom and costs diluted throughout the entire economy. It'd make a big difference to a few and hardly any to most.

 

[Togo]

Why would moving cash from shareholder profits to low-income wage earners increase inflation?

Minimum wage increase don't only come from shareholder profits..

In the example we were considering, that's where they came from. If you want to change the example, you should flag that.

And as a response to increased costs to businesses, they raise prices to compensate. Rents and utilities go up in response to the increase too. It's a cycle.

Ok, so you're arguing that Owners/Shareholders will pay themselves a profit which is essentially fixed, passing any additional costs on as higher prices. But the prices were set initially to balance demand and income, weren't they? You can't say that they just raise prices to compensate and everything else stays the same, because if that was possible they would have done it already. So rising prices must reduce their income in some way, unless there is something acting to shift the demand curve and change the optimum price. So assuming they are running their business in the interests of making a profit, then the idea that a cost increase would simply move their prices is false.

Similarly, why would rent go up because employees are paid more? Can you be specific?

I think what might be happening here is a confusion between cause and effect. You're asserting that prices go up, rent goes up and utilities go up, and thus inflation goes up, but it sounds like the converse is true. Inflation increases, because more money is spent, and that moves prices, rents and utilities up as a result of the inflation.

Which is fine, but the effect should be tiny. And claiming that giving money to poor people rather than rich people is inflationary and thus to be avoided isn't an argument that's going to travel very far.

 

[Axulus]

The burger robot pictured below is “poised to disrupt the fast food industry.” The Momentum Machine “does everything employees can do except better — it slices toppings like tomatoes and pickles immediately before it places the slice onto your burger, giving you the freshest burger possible. It’s more consistent, more sanitary, and can produce ~360 hamburgers per hour.”

 

[Nice Squirrel]

Well, like those automated check outs at the grocery store... I'll be passing them by.

 

[ksen]

That's a dumb meme since those are being developed right now when the minimum wage is at $7.25/hr. It's got nothing to do with $15/hr.

But it does raise a good point about what do we do as a society when machines make most of the population superfluous. What do we do? Just tell those shunted aside to "skill up?" What is the free market solution to too few jobs?

 

[Loren Pechtel]

By the time the system has returned to equilibrium all you will have is inflation, nobody's standard of living will be increased.

They will. Even if every cent of increased cost were passed directly to consumers, there'd be a downward redistribution with gains concentrated at the bottom and costs diluted throughout the entire economy. It'd make a big difference to a few and hardly any to most.

What you are missing is that those higher up the ladder will see their purchasing power eroded and will demand more. When things have returned to equilibrium their wages will have gone up just as much as those that benefited from the minimum wage increase.

 

[Loren Pechtel]

Well, like those automated check outs at the grocery store... I'll be passing them by.

Until you find that all you have are the robots.

- - - Updated - - -

That's a dumb meme since those are being developed right now when the minimum wage is at $7.25/hr. It's got nothing to do with $15/hr.

But it does raise a good point about what do we do as a society when machines make most of the population superfluous. What do we do? Just tell those shunted aside to "skill up?" What is the free market solution to too few jobs?

$7.25/hr *HERE*. They'll show up first in the places with a higher minimum wage.

 

[Canard DuJour]

They will. Even if every cent of increased cost were passed directly to consumers, there'd be a downward redistribution with gains concentrated at the bottom and costs diluted throughout the entire economy. It'd make a big difference to a few and hardly any to most.

What you are missing is that those higher up the ladder will see their purchasing power eroded and will demand more. When things have returned to equilibrium their wages will have gone up just as much as those that benefited from the minimum wage increase.

I'm not missing it, I addressed it in posts 89, 112 and the one to which you ostensibly reply. Try doing more than repeating your assertions if you want to be taken seriously.

 

[Togo]

What you are missing is that those higher up the ladder will see their purchasing power eroded and will demand more. When things have returned to equilibrium their wages will have gone up just as much as those that benefited from the minimum wage increase.

I'm not missing it, I addressed it in posts 89, 112 and the one to which you ostensibly reply. Try doing more than repeating your assertions if you want to be taken seriously.

I also addressed it in post 133.