Difference between revisions of "Myths/raising the minimum wage would raise prices"
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* And finally, who cares if prices go up a little if this means that more people can make a decent living? If you're getting something at a low price only because someone else has to suffer, then you're essentially stealing their work to save money. | * And finally, who cares if prices go up a little if this means that more people can make a decent living? If you're getting something at a low price only because someone else has to suffer, then you're essentially stealing their work to save money. | ||
==Related== | ==Related== | ||
− | See also [[/ | + | See also [[/rejected]] for an argument that makes sense on the surface but doesn't pan out when the numbers are checked. |
==Footnotes== | ==Footnotes== | ||
<references> | <references> | ||
<ref name=bpundit>'''2015-07-24''' The Bitchy Pundit, comment on [https://plus.google.com/u/0/+Bitchypundit/posts/1hfBE8F4vKH this post], citing [http://www.economist.com/content/big-mac-index The Economist] for prices</ref> | <ref name=bpundit>'''2015-07-24''' The Bitchy Pundit, comment on [https://plus.google.com/u/0/+Bitchypundit/posts/1hfBE8F4vKH this post], citing [http://www.economist.com/content/big-mac-index The Economist] for prices</ref> | ||
</references> | </references> |
Revision as of 18:10, 24 July 2015
Myth: Raising the minimum wage will result in higher prices. |
Myth
There is a widespread belief that raising the minimum wage will just raise prices. It's not clear whether the unspoken assumption is that the prices would go up enough to negate any wage-gains, but we'll examine that implicit claim too.
Reality
- An examination of fast-food prices in other countries, where the minimum wage is often much higher than in the US, shows this to be a bogus claim: "A big mac in Denmark, where McDonald's employees earn $21.00/hr cost $5.08. Here in the US, where they earn less than $8 an hour, a big mac costs $4.79. In Australia, where the minimum wage is over $15/hr, a big mac costs $3.92."[1]
- The amount by which prices would go up cannot be anywhere near the wage increase, since wages are only a slice of the final retail cost.
- To the extent that prices are determined by supply and demand:
- the prices would not go up if demand did not increase.
- if the price goes up, this indicates an increased demand, which implies greater buying power – a desired goal.
- And finally, who cares if prices go up a little if this means that more people can make a decent living? If you're getting something at a low price only because someone else has to suffer, then you're essentially stealing their work to save money.
Related
See also /rejected for an argument that makes sense on the surface but doesn't pan out when the numbers are checked.
Footnotes
- ↑ 2015-07-24 The Bitchy Pundit, comment on this post, citing The Economist for prices