So let's say that I am a low wage worker working at McDonalds and I get a wage increase. I spend that money mostly within my community, and businesses in my community then have a need to expand, and create more jobs, and hire more people who in turn have more money to spend locally. Other businesses recognize that the existing ones in my community are doing better, so they invest in my community, creating more jobs, and bringing even more money into my community.
I understand what you are saying about some of the money migrating out of the local economy due to the fact that most of the goods we purchase aren't locally made, but there are other factors that tend to balance that.
I also think that there is a moral hazard in having a minimum wage based upon local living costs. Maybe poor people shouldn't live in high cost of living areas. If I was a minimum wage worker, I certainly wouldn't chose to live in Manhattan or Beverly Hills. That doesn't mean that I can't work there though, I can commute.
Cost is an important factor but not a determinative one so we're close to each other on this one. While price has to be high enough to produce sufficient profit and cash flow, after that the market determines the optimal price.costs is a primary determining factor in pricing, but it's not the only factor... so I think I kinda agree with you on that point.
Well this is nice. Regardless of your political affiliation it should make everyone glad to see so many Americans getting a raise and a likely better quality of life. I'm sure Walmart wouldn't have done this if they thought it would have severe consequences for them. I'm pleased =).