Out of curiosity, what do you suppose are the long-term effects of raising minimum wage?
If you were a landlord managing an apartment building, how much do you charge for a unit? If all of your tenants suddenly make twice as much money as they did, how long before you double their rent?
If a McDonalds needs to pay all of its employees twice as much money, how long before they double their food prices to make up the difference?
I feel like the working poor in this country get a terrible deal in this world - we definitely need to make conditions better. But does raising minimum wage actually do that in the long run? Or does it just increase inflation and destroy any savings the poor might have?
> If you were a landlord managing an apartment building, how much do you charge for a unit? If all of your tenants suddenly make twice as much money as they did, how long before you double their rent?
Remember, your tenants are now able to move to gentrified areas, their wages allow that. Some might want to get a mortgage for a house they could not dream of previously. So now your apartments will have to compete with much wider selection of property. You'll raise prices definitely, but not as much as you would think, and you'll spend most of the difference doing renovations and spending on security.
>Out of curiosity, what do you suppose are the long-term effects of raising minimum wage?
* An increase in inflation but nowhere near enough to offset the rise in wages at the lower end.
* An increase in growth as the money multiplier effect kicks in.
* No real change in employment.
* Share prices fall and lowered earnings projections for classes of business that rely on minimum waged labor.
* As a sort of general guide, look at Australia.
>If you were a landlord managing an apartment building, how much do you charge for a unit? If all of your tenants suddenly make twice as much money as they did, how long before you double their rent?
It depends. This does not happen in a vacuum. If there are a lot of apartments coming on the market at the same time rent could stay the same or even go down.
Every business is subject to competition which would moderate the effect of inflation and tons of businesses that manufacture often respond to an increase in demand by raising production rather than prices (e.g. car manufacturing).
If it went up to $20 I'd project something like 4% inflation.
>If a McDonalds needs to pay all of its employees twice as much money, how long before they double their food prices to make up the difference?
If you want to see what happens to McDonalds, look at Australia:
They A) raised the prices, B) raise the quality, C) actually kept the big mac price more or less the same, C) are facing competition from nicer restaurants (people have more disposable income and use it in restaurants other than el cheapo mcdonalds).
>I feel like the working poor in this country get a terrible deal in this world - we definitely need to make conditions better. But does raising minimum wage actually do that in the long run?
Yes.
>Or does it just increase inflation and destroy any savings the poor might have?
The poor have debts, not savings. Demand pull inflation caused by increased wages is just about the best possible outcome for them, but it is HORRIBLE for the rich and the rich have a very well oiled propaganda machine. Hence the "why don't you propose solutions" crowd and the downvotes on actual solutions ^^.
The market will solve it if the number of housing units is large enough compared to the number of families, provided no one vendor owns too large a fraction of them.
Not that I know of. Traditionally it has been handled by attaching spending restrictions to the income assistance - e.g. food stamps, medicare, unemployment, student loans, etc.
If you were a landlord managing an apartment building, how much do you charge for a unit? If all of your tenants suddenly make twice as much money as they did, how long before you double their rent?
If a McDonalds needs to pay all of its employees twice as much money, how long before they double their food prices to make up the difference?
I feel like the working poor in this country get a terrible deal in this world - we definitely need to make conditions better. But does raising minimum wage actually do that in the long run? Or does it just increase inflation and destroy any savings the poor might have?