AJT
Rookie
- Apr 24, 2015
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The former governor of South Carolina, Carroll Campbell, said it:
"The trouble with the left is they don't understand dynamics."
Raising the minimum wage will begin such a dynamic. When they are forced by law to pay more wages to their employees, employers, being the businessmen that they are,whose main concern is maximizing profits, will not sit idly by and watch those profits dwindle away.They will pass the increased cost of doing business along to consumers by raising their prices. The process is called "inflation."
Yes, some people will be taking home more money, but they and everyone else will be paying more for the things they buy. What economists call "real disposable income" will hardly go up at all.
The concept is part of classical Economic Theory:
Biz/ed - Wage-price spiral | Biz/ed
"The trouble with the left is they don't understand dynamics."
Raising the minimum wage will begin such a dynamic. When they are forced by law to pay more wages to their employees, employers, being the businessmen that they are,whose main concern is maximizing profits, will not sit idly by and watch those profits dwindle away.They will pass the increased cost of doing business along to consumers by raising their prices. The process is called "inflation."
Yes, some people will be taking home more money, but they and everyone else will be paying more for the things they buy. What economists call "real disposable income" will hardly go up at all.
The concept is part of classical Economic Theory:
Biz/ed - Wage-price spiral | Biz/ed