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Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work
Wages and prices go hand in hand.
First a lesson about Prices.
*The Great Recession resulted in a 4 percentage Consumer Price Index (CPI) drop. At the outset of the Great Recession Demand weakened significantly, no longer justifying prices. So, for about two years; they went slightly lower. See here, the CPI history:
The consequence is this:
*Prices are now "well above where they were before the Great Recession", unemployment is back down to 4.9% (slightly above normal); but
*The Employment-to-population ratio is much lower than in 2007/8 because the economy is still not creating enough jobs.
The economy still needs a larger rebound, however, to get some Spending-Power back into the hands of those who have none below the Poverty Threshold. (Btw, that's 43 million fellow Americans.)
Raising the Minimum Wage puts more people presently below the Poverty Threshold at a higher level of family Income, and thus spending their income towards boosting economic growth. And who pays for that? Not the "gummint" but you and me, the Consumer. Not that much, however.
Yes, some prices will rise to cover the additional labor costs. But because of higher incomes (below the Poverty Threshold) Demand will also increase thus covering the "enhanced production costs". And so what if prices rise as long as it helps put people back to work, and thus consume at a higher income-level?
Which is apparently a notion too thick for some feeble minds.
We cannot have both ultra-low Minimum Wages AND Economic Fairness - that is, lower the number living below the Poverty Threshold ...
The best argument against a minimum wage hike, I have ever seen. Kudos, from someone who thinks it should go up a slight amount to adjust for inflation alone.
Wages and prices go hand in hand.
First a lesson about Prices.
*The Great Recession resulted in a 4 percentage Consumer Price Index (CPI) drop. At the outset of the Great Recession Demand weakened significantly, no longer justifying prices. So, for about two years; they went slightly lower. See here, the CPI history:
The consequence is this:
*Prices are now "well above where they were before the Great Recession", unemployment is back down to 4.9% (slightly above normal); but
*The Employment-to-population ratio is much lower than in 2007/8 because the economy is still not creating enough jobs.
The economy still needs a larger rebound, however, to get some Spending-Power back into the hands of those who have none below the Poverty Threshold. (Btw, that's 43 million fellow Americans.)
Raising the Minimum Wage puts more people presently below the Poverty Threshold at a higher level of family Income, and thus spending their income towards boosting economic growth. And who pays for that? Not the "gummint" but you and me, the Consumer. Not that much, however.
Yes, some prices will rise to cover the additional labor costs. But because of higher incomes (below the Poverty Threshold) Demand will also increase thus covering the "enhanced production costs". And so what if prices rise as long as it helps put people back to work, and thus consume at a higher income-level?
Which is apparently a notion too thick for some feeble minds.
We cannot have both ultra-low Minimum Wages AND Economic Fairness - that is, lower the number living below the Poverty Threshold ...
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