> Raising the minimum wage allows for a (very) short term benefit, but in the medium and long run, it drives inflation up.
This is probably strictly true as written, but misleading, as it also provides a medium and long term benefit, as it (alone) drives inflation up less than the ratio by which the minimum wage was increased.
> The minimum wage and inflation are effectively proportional.
No, they aren't. Even price levels, which could be more reasonably expected to have some relation to minimum wage, aren't simply proportional. If inflation was proportional to minimum wage, places that didn't have a minimum wage would have zero inflation; if price levels were proportional to minimum wage, places that didn't have a minimum wage would have zero price levels. Neither of these is the case.
> Raising minimum wages and inflation are very, very different.
Not so different, in terms of how they impact purchasing power. If anything, though, inflation is more egalitarian because it impacts everyone and everything.
> Raising the minimum wage would simply make 2.6% of the working population better off at the expense of their employers.
But never the less those 2.6% percent will be directly responsible for the inflation since they barely get by now and if you increase their wages the prices will adjust accordingly so that they barely get by in the future. Also it has been shown that if you increase minimum wage all wages across the board will increase, even the highest ones.
> Central bank monetary policy causes the money supply to increase, creating inflation.
There is no evidence for that. The money supply has been expanded vastly in the last years but still there was almost no inflation. Why? because all the money arrived in the financial market where it "inflated" the value of financial products causing one bubble after the other.
There is a very easy way to make absolutely sure that the money arrives in the real economy (which will be the driver of "investment-worthy" projects in the future): raise wages.
> As many have pointed out, the minimum wage in many places has been eroded for years by inflation, so increasing it is really just making up for a lack of indexing on it.
The last minimum wage hike was in 2009, when the minimum wage was increased to $7.25. Inflation adjusted to 2019 dollars, that would be about $8.70.
In 2016, both main Democrat candidates supported a $15 minimum wage, which would be an increase of around 10X the required inflation adjustment.
What is it that you were saying about arguing in good faith?
>and the government raising minimum wage ( hurts the economy, regressive against low income individuals, bad for the individual, bad for employers
Government raising the minimum wage is:
* Bad for profits (the main effect is to redirect cash flows from profit to wages).
* Progressive for low income individuals (it raises the bar on low wages - raising wages just about the minimum). The inflationary impact is very muted compared to this.
* Positive for GDP growth - the multiplier effect of money going to low wage earners is much higher (>3x) than profits (<1x) because they have a higher proclivity to spend the money than profit recipients will.
Raising minimum wages and inflation are very, very different. It affects the lower end of the income spectrum in a very disproportionate way, and does not cause an equivalent raise in prices, there is an entire universe of other economic factors at play.
I mostly wanted to point out the incongruity in your putting down of the article/author, when your argument is based on superficial assumptions.
>Then the rents of those 1BR apartments would rise to capture that new minimum wage.
This is commonly expressed as a consequence of raising the minimum wage, but in the most nuanced discussions of inflation that I've been exposed to, people are mindful of the fact that inflation ripples out into different segments of the economy in different ways.
I think the most plausible outcome is that certain segments of the economy function as shock absorbers, which take the hit of inflation disproportionately as the economy rebalances itself and relieves pressures on segments of the economy that were being squeezed unsustainably hard.
And so there is indeed a ripple effect of raising the minimum wage, namely there's more money to spend, but it radiates out into the economy in disproportionate ways, and can be a net benefit to wage earners because prices on critical necessities may rise, but not in proportion to the rise in wages.
> We found that for every $1 increase in minimum wage, the percentage of workers working more than 20 hours per week (making them eligible for retirement benefits) decreased by 23.0%, while the percentage of workers with more than 30 hours per week (making them eligible for health care benefits) decreased by 14.9%.
To be fair, this isn't an argument against minimum wage, but an argument for reform in health care and retirement funding. Keep in mind, this technique was always available to them, this almost seems a spiteful reaction, or at least they would have done it sooner if they'd thought to.
> More wealth creation means more wealth.
Does it mean more income to the lowest earners in a high-GDP country? Or does it just mean GDP has increased?
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