Why does the cost of living go up by the same amount though? Yeah some domestic industries that rely on low income workers like food and agriculture would have increased payroll costs, but how are other major living costs like rent, foreign made goods, and transportation tied to minimum wage?
because if they can charge you more for that ramshackle hut they will, housing is tied to who will pay for it, if the hypothetical burger flipper makes more, he or she is also willing to spend more of that on housing, as is every other hypothetical burger flipper, meaning the hut-lord can increase his price, as there is now more funds in the system, and more competition due to those funds, no new huts are built, so the price of all previous huts will just rise. Without regulation, this is how it goes.
Okay, so if giving a smaller group of people who earn minimum wage a 10% increase would cause these price increases, wouldn’t it be far worse to give everyone a flat 10% personal income tax cut? Surely that would make inflation go absolutely bonkers as greedy capitalists all raise prices to gobble up the extra money flowing into the hands of the people and leave them no better off right? How about we raise taxes instead and the opposite happens, people can’t afford these things and corporations and landlords are forced to drop prices to meet the new “supply” of general wages, making no material difference to the individual person but instead clawing that money from the capitalists back to the government who can spend it on public works like infrastructure, welfare, even subsidized housing for low income earners?
Why does the cost of living go up by the same amount though? Yeah some domestic industries that rely on low income workers like food and agriculture would have increased payroll costs, but how are other major living costs like rent, foreign made goods, and transportation tied to minimum wage?
because if they can charge you more for that ramshackle hut they will, housing is tied to who will pay for it, if the hypothetical burger flipper makes more, he or she is also willing to spend more of that on housing, as is every other hypothetical burger flipper, meaning the hut-lord can increase his price, as there is now more funds in the system, and more competition due to those funds, no new huts are built, so the price of all previous huts will just rise. Without regulation, this is how it goes.
Okay, so if giving a smaller group of people who earn minimum wage a 10% increase would cause these price increases, wouldn’t it be far worse to give everyone a flat 10% personal income tax cut? Surely that would make inflation go absolutely bonkers as greedy capitalists all raise prices to gobble up the extra money flowing into the hands of the people and leave them no better off right? How about we raise taxes instead and the opposite happens, people can’t afford these things and corporations and landlords are forced to drop prices to meet the new “supply” of general wages, making no material difference to the individual person but instead clawing that money from the capitalists back to the government who can spend it on public works like infrastructure, welfare, even subsidized housing for low income earners?