Dec
01
More proof that prices are a reflection of wages:
ByI regularly argue that raising the minimum wage will not help Americans since prices are reflection of what people make, meaning that if you raise the minimum wage businesses will raise prices to reflect the extra capital in the system. The effect is that the person who just saw their wage increase is right back to where they started because of the higher prices.
As evidence, during a conference call with the executives of the Cheese Cake Factory, they told shareholders that they would be raising the prices on their menu to reflect, drum roll, higher wages.
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2 Comments
December 1st, 2006 at 9:16 pm
This topic angers me to the core. Republicans arguing that the minimum being raised from 5.15 to 7.25 an hour are going to get THUMPED on the topic. You cannot defend it. Nobody understands equilibrium wages and aggregate supply curves. They just see CEO pay out of control and ‘normal’ wages stagnating.
The issue was on the state ballot in six states and it won every single ballot.
This is beyond unrealistic to defend.
December 2nd, 2006 at 1:00 am
Obviously nobody understands wages and supply curves, which is why we have a minimum wage.
Also wages have stagnated not because CEO’s don’t want to raise salarys but because the Fed has done a great job at controling inflation.