https://reason.com/video/2024/12/19/no-californias-20-minimu...
Is this an opinion piece or news? It's categorized as "ideas" at the top of the page. I do not know what that means. But the advocacy at the end makes it seem not like straight news.
It’s almost magical that simplified, reductionist economic models don’t always play out in the real world.
Additionally, this research has historically yielded mixed results (likely due to the difficulty of isolating the effect of minimum wage in a highly dynamic marketplace for labor). Here's a good article on the topic from the SF Federal Reserve: https://www.frbsf.org/research-and-insights/publications/eco...
All that to say, I prefer the simple intuition that people want less of a thing when it costs more. This is a basic fact of life that most everyone seems to accept until policy gets mentioned.
And still, Apple got to be the biggest company in the world by charging more, constantly and systematically.
Maybe there are more things in heaven and earth than are dreamt in your philosophy.
A better example of quantity demanded paradoxically increasing with price is in the designer hand bag market. The value of luxury goods is in part due to the signal they send that the owner can afford such an expensive item.
However, that is just an exception proving the rule. Your point about Apple makes no sense because they've also increased the quality of the goods they ship in conjunction with their price. Unless you're suggesting that minimum wage laws somehow enhance the laborers' productive capacities.
It's even in TFA: higher wages means lower rotation, which means less constant re-training from scratch, which means higher output quality.
I'm poking fun at the line of reasoning of course. Those who find the opportunities to invest 10 for 30 tend to win in a free market system. That is the beauty of competition.
Merry Christmas!
Yeah, I only need a few millions to invest /s
> Those who find the opportunities to invest 10 for 30 tend to win
There are so many factors at play, in a modern "free market system", that believing simple principles will always apply perfectly is just another ideology. In any case, very few businessmen will ever admit that paying more for labor can have good results - even when they directly benefit from those same results - because most of them fundamentally resent having to pay for it in the first place. And so ideology prevails.
Merry Christmas to you too!
It’s no different than when politicians pass a law that the police union doesn’t like, and crime goes up. Look! Proof that the law was bad. It’s remarkable that anyone would say otherwise. Of course it has nothing to do with the fact that the police just stop doing their job until they get the law changed.
Is there evidence of that, that you know of?
To illustrate, if a McDonald's location can sell 1000 big macs a day at $2 per burger, do you expect they'll sell more (or even as many) if they raise the price to $3?
Of course not. This intuition is obvious to everyone until policy gets involved. It would not make sense for employers to want just as much labor when the price goes up. This would imply a perfectly inelastic demand for labor.
Ceteris paribus is Latin for "holding a cat by its paws to look under its tail", named so because it tells you how long you can "hold other effects equal" before you'll be made to regret the attempt.
This is to say, the economy is a system of tight feedback loops, not independently random effects. This is the part I rarely see emphasized wrt. "ceteris paribus". You're trying to hold constant the very effects that will react to change under discussion, which both severely limits the range of a single forecasting step, and should invite conversation about those other effects.
As you've pointed out, any economic policy proposal should consider 2nd/3rd/ith order effects.
I mean, there are other factors in employment decisions. Raising the price to $3 may reduce volume but increase revenue.
People need to eat. If McDonald’s is the cheapest food or only food available (say because they are the only one available) it won’t matter that they raised their price.
To say it another way, if businesses could reduce labor, they would have already done it. They don’t have fixed labor budgets to use up. Their ideal labor spend is $0. So in some sense it doesn’t matter what the labor cost is as long as the business isn’t losing money.