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Comment by Vicinity9635 | Hacker News Reader

The fact that there hasn't been a federal minimum wage hike in 14 years should tell you we live in a fake democracy.

Inflation robs the working class of power without ever having to get so much as a bill past congress, and it's no accident.

The "Inflation reduction act" should have been nothing more than a bill that locks automatic increases to the minimum wage to accumulated inflation. The fact that it was anything else means it wasn't about reducing inflation at all, because the only way to do that is to destroy money. The only way to reduce the impact of inflation is to raise wages. The bill did neither, of course.

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The Federal minimum wage isn’t relevant in the vast majority of States that set their own minimum wage. This is a good thing; the US is too geographically and economically diverse to have a single minimum wage. The minimum wage in expensive places like Seattle is the median wage in States with weaker economies and lower costs of living.

the problem with that argument is that the State minimum wage set is always at the Federal rate or higher...never ever lower...that destroys your point

It's a strong argument for keeping the Federal rate low, since it needs to effectively peg the lowest COL area (which may not be able to support higher wages).

Maybe, but it’s too low across the board.

Should we accept your word for it or should we receive some evidence?

Your argument doesn’t address that the federal minimum wage is too low in the states where it is not superseded by a state minimum wage law.

The minimum wage also applies to Puerto Rico, where the median household income is about 21K. That's less than a what a dual income household would bring in making minimum wage.

Minimum wage is not a very useful policy, especially in a system with relatively low workforce participation.

Firstly, minimum wage is politically unpopular in most areas. Keep in mind the median voter is older or retired and cares more about expenses than income. So even modest cost of living increases can have huge political repercussions.

Secondly, minimum wages are very inefficient as a poverty reduction policy. For every dollar you impose on businesses, a % is going to be eaten by inflation, a % is going to into reduced labor demand, and a % is going to families well above the poverty line (second or third household earners).

This is why you see lots of Western countries not even bother with them.

(Minimum wage as a policy to induce immigration - that's another story).

> Firstly, minimum wage is politically unpopular in most areas.

In the US raising the minimum wage is wildly popular, with 89% wanting to raise it some amount and 62% supporting $15/hr.

> For every dollar you impose on businesses, a % is going to be eaten by inflation, a % is going to into reduced labor demand, and a % is going to families well above the poverty line (second or third household earners).

Only if you assume a perfectly efficient labor market, which is often far from how things play out in studies regarding the minimum wage.

> This is why you see lots of Western countries not even bother with them.

There are only a handful of western countries without a minimum wage and most of them either have very strong collective bargaining, a strong social safety net with some form of guaranteed minimum income, or both. I think those are reasonable policies but they aren't what opponents of the minimum wage are generally advocating for.

https://www.pewresearch.org/short-reads/2021/04/22/most-amer...

> Firstly, minimum wage is politically unpopular in most areas.

You’re so wrong it’s actually astounding: https://www.pewresearch.org/short-reads/2021/04/22/most-amer... https://www.dataforprogress.org/blog/2023/5/24/725-isnt-cutt... https://www.graydc.com/2023/04/21/study-finds-that-23-americ...

> This is why you see lots of Western countries not even bother with them. Again you’re just so wrong: most of Europe has a much better adjusted minimum wage: https://en.wikipedia.org/wiki/List_of_European_Union_member_...

> Secondly, minimum wages are very inefficient as a poverty reduction policy. For every dollar you impose on businesses, a % is going to be eaten by inflation, a % is going to into reduced labor demand, and a % is going to families well above the poverty line (second or third household earners).

Just wrong again:

https://www.rwjf.org/en/insights/our-research/2022/08/explor...

https://www.brookings.edu/articles/higher-regional-minimum-w...

https://thehill.com/changing-america/respect/poverty/3636046...

Even the CBO generally disagrees with your falsehoods: https://www.cbo.gov/publication/55681

Why spread misinformation?

The CBO data actually highlights this. These are all miniscule improvements for the big outlay of costs.

You can see this in the huge predicted decline in Real Family Income (most of that is only felt by people in middle class or above, but still, if this is just a redistribution mechanism there are more efficient ways to do that).

Actually it doesn’t — the decline in real income is not huge even on the high end and actual site comments on its findings:

“ How would increasing the minimum wage affect the number of people in poverty? By boosting the income of low-wage workers with jobs, a higher minimum wage would lift some families’ income above the poverty threshold and thereby reduce the number of people in poverty. But low-wage workers who lost employment would see their earnings decrease, and in some cases their family income would fall below the poverty threshold. The first effect would tend to be larger than the second, so the number of people in poverty would generally fall.”

Yes there would be job losses but that effect is shown to not be nearly as large as the number of people lifted out of poverty.

Increasing wages is itself inflationary. If the costs of a company increase then so too do the price of their product or service. I’m not disagreeing that we shouldn’t increase wages, but I just want to point out that wages and inflation are correlated.

Increasing wages correlates with inflation, but it's a _very_ weak correlation. In most industries labour does not make up the lion's share of business expenses.

Studying minimum wage increases between 1978 and 2015:

> we find prices grow by 0.36 percent for every 10 percent increase in the minimum wage.

https://research.upjohn.org/cgi/viewcontent.cgi?referer=&htt...

Considering that company profits and the income of the top 20% went up, it seems fair that other income goes up too. There may be some inflation but I think wage earners would still be much better off.

With that logic you might as well pay no one anything because that would increase the prices. It just doesn't pencil out logically when you think it through. Fact is, wages are historically depressed. We've shown you can have higher ratios of wages to prices in the past, we've just never bothered to keep the ratio maintained as we've seen GDP growth over the years, and have instead favored having the capital class to gobble up the resulting gains instead of seeing more redistribution of all of this accumulated wealth as in years past.

I'm for wage increases but wouldn't that push inflation higher? Raising interest rates and a funding package to weather the hit seems reasonable to me.

I’m skeptical that consumption by the working poor is what drives inflation.

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