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smooth · 10-29-2005, 02:04 PM

secretmethod's got it right in regards to the empirical evidence of whether wage increases hurt job opportunities (they don't).

samcol, in regards to whether rising prices due to wage increases a couple things must be mentioned and realized:

1) prices are conditional upon demand, not necessarily cost to produce
I don't dispute that wages are part of overhead, and that overhead must be analyzed before a tenable price is set
it seems to me that if one's profit margin is so low that a rise in wages commensurate with the changing value of the currency would put someone's business in the red, one's business model is inefficient and/or demand is too low for the product

2) regardless of point 1, cost and price increases in one sector do not necessarily result in a rise in prices across the board
if we examine what impoverished workers consume, we can do a pretty good job of estimating the real world impact of rising wages on their cost-of-living
it may be true that raising the minimum wage could conceivably raise the cost of Taco Bell or Kentucky Fried Chicken products (although their prices haven't actually risen very much if you think about it, and minimum wages have gone up over the years, so that's an interesting tangible response to the notion that prices automatically rise and jobs disappear when wages rise), but impoverished workers don't need to buy those kinds of products. They don't need to go out to the movie theators, or to the 7-11, or where else do we imagine workers are being paid minimum wage?

What won't rise are costs associated with groceries, or rent, or vehicles, perhaps gas might be one of the few sectors that would be a necessity that could conceivably rise in price when attendants earn more

What I'm saying is that most of what workers absolutely need is already subsidized and the sectors they consume from: rent, groceries, energy (except gas as I poited out above), government services are usually private owner/operators or unionized and won't benefit from an increase in the minimum wage

10-29-2005, 02:04 PM	#15 (permalink)
smooth Junkie Location: Right here	secretmethod's got it right in regards to the empirical evidence of whether wage increases hurt job opportunities (they don't). samcol, in regards to whether rising prices due to wage increases a couple things must be mentioned and realized: 1) prices are conditional upon demand, not necessarily cost to produce I don't dispute that wages are part of overhead, and that overhead must be analyzed before a tenable price is set it seems to me that if one's profit margin is so low that a rise in wages commensurate with the changing value of the currency would put someone's business in the red, one's business model is inefficient and/or demand is too low for the product 2) regardless of point 1, cost and price increases in one sector do not necessarily result in a rise in prices across the board if we examine what impoverished workers consume, we can do a pretty good job of estimating the real world impact of rising wages on their cost-of-living it may be true that raising the minimum wage could conceivably raise the cost of Taco Bell or Kentucky Fried Chicken products (although their prices haven't actually risen very much if you think about it, and minimum wages have gone up over the years, so that's an interesting tangible response to the notion that prices automatically rise and jobs disappear when wages rise), but impoverished workers don't need to buy those kinds of products. They don't need to go out to the movie theators, or to the 7-11, or where else do we imagine workers are being paid minimum wage? What won't rise are costs associated with groceries, or rent, or vehicles, perhaps gas might be one of the few sectors that would be a necessity that could conceivably rise in price when attendants earn more What I'm saying is that most of what workers absolutely need is already subsidized and the sectors they consume from: rent, groceries, energy (except gas as I poited out above), government services are usually private owner/operators or unionized and won't benefit from an increase in the minimum wage __________________ "The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman