Venture capitalist says a $28 minimum wage would create a more robust economy
geekwire.com
geekwire.com
(from Garrison Keillor's Lake Wobegon, where "all the women are strong, all the men are good looking, and all the children are above average")
With that logic, why 28 and not 5000? This Keynesians are being so cheap!
Let me give you a good pair of austrian rolling eyes...
$11-15[1] by 2020 is a reasonable national range for a minimum wage with certain states/localities raising it higher. The simple fact is, the peach picker in rural Georgia has a lower cost of living than the Subway "sandwhich artist" in NYC.
[1] 2016 Dollars, permanently adjusting for inflation against 2016 USD indefinitely. This whole "random correct every so often" is simply disruptive to both businesses and workers since it makes projection difficult compared to small, annual raises linked to inflation.
I say we make Donald Trump pay for the wall, and we have many ways of making his life miserable to make sure he does it.
1) Revoke his citizenship. 2) Make IRS audit his companies. 3) Stop approval of various permits for his various buildings until he complies.
The things we can do as a government to this chump are endless.
You're suggesting that if you raise M, P goes up. But there's two other possibilities, instead: Q goes up, or V goes down.
We actually did this experiment just recently, where we printed a whole bunch of money and dumped it into the economy (quantitative easing). We did NOT get inflation (increase in P), because V went way down over the same period - basically, the banks absorbed all of the money and didn't invest it, so it didn't actually move into the economy.
But if we gave money to poor people by printing currency, it's likely that V would go up, because these people would actually spend all of that money, and the people they spent it with would spend it, etc.
It's possible that in this situation, we WOULD get price inflation. But even in this case, that's not clear - what might happen instead is that Q goes up - we would simply get a general increase in demand for goods and services, but prices would remain more or less stable.
The difference is whether you think that we are limited in productive capacity. Many (some?) economists think that the main problem with our economy is a severe lack of demand - people are just too poor to buy shit. If people wanted to buy more stuff, we'd have no problem making it - we have factories and factory factories. In this situation, if we give everyone a large fistful of cash, all that happens is we all suddenly get to be busy doing exactly what we want - making shit and enjoying the products - without a huge increase in price.
Price increases happen when people are demanding goods and services but we can't produce enough to meet that demand. It's possible this might happen if we print a bunch of money, but I think in our economy, where the main story is severe underemployment, where productive capacity is going to waste, where smart people who get PhDs don't know what to do with themselves, this is not what would happen; we're much more likely to see a long period of economic growth before we start to see inflation happening.
On the other hand, I just looked at the cost of my public university: 100% increase, flat out, on tuition, compared to what I paid 10 years ago. In the expensive east coast city in which I live, home prices have doubled since the market crash in 2008. My medical insurance went from $10 copays a few years ago to my current 'catastrophic' plan; this means I pay 100% out of pocket for EVERYTHING until I hit a $2000 deductible. My premiums have not gone down.
So in essence, inflation seems rampant in those products in which the majority of my income is used.
Things that I spend a few percent of income (food, junk from Walmart, electronics) seems to have stabilized in price, yet is in every way inferior to past versions. And the costs to manufacture have dropped precipitously since technology has improved so much while third world wages have become the norm for the owners, even now in the West.
So what's this BS about low-inflation?
And yes, it should be far more fragmented than state-wide. There should be a premium for urban areas.
You can see that the federal minimum wage peaked in real dollars in 1968 (not coincidentally, the heyday of labor) - since that time, capital won the class war and the real minimum wage has dropped, even though the nominal federal minimum went up.
If we kept up with that high point, the federal minimum should be something like 40% hire than it is, more like $12.50.
http://www.epi.org/blog/putting-9-minimum-wage-context/
"..if the minimum wage had kept pace with average wages—i.e., if minimum wage workers saw their paychecks expand at the same rate as the average worker—it would be about $10.50 today. If the minimum wage had kept pace with productivity[i]—i.e., the economy’s overall capacity to generate income— it would be almost $18.75 today. Finally, imagine if workers at the very bottom were seeing the same kind of raises as workers at the very top. If the minimum wage had gone up at the same rate as wages for the top 1 percent, it would be over $28 per hour."
The person in the story is using EPI's last number