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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: mistermj who wrote (217780)	2/11/2007 9:53:09 PM
From: Katelew	Read Replies (3) \| Respond to of 281500

Mj, your own article said layoffs following min. wage increases ranged from 1 to 3%. Those numbers are an acceptable trade-off. The economy adjusts. Increased wages filter up thru the economy, increasing sales, and companies start to rehire. Think of it like this. The fast food employees in a town get raises, except for 1 to 3% of them which are laid off. Those left working all go and buy shoes. The shoe store has increased sales. It begins to hire new workers, maybe even the same ones that were laid off from the fast food places. Now I'm being very simplistic. The owners of the fast food places will try to raise their prices to cover the increased wages. If the prices stick, this will cause some dislocations to the local economy as consumers pay the higher prices and thus have less disposable income to buy other things. It's better to have frequent small increases in the minimum wage than less frequent big ones so as to minimize such dislocations as this and as increased unemployment. And there's less pain during times like now with our low unemployment. Let me suggest a few other things for you to ponder: Increasing the minimum wage affects very few workers in the overall economy, less than ten million, I think. Outside of the South, 'minimum wages' have automatically risen up into the $8 to $10 range because of labor shortages Businesses constantly have to adjust to increased costs, such as raw materials, energy, insurance, etc. They adjust and the economy keeps on humming. Businesses raise wages to attract more talented employees. They adjust to these costs and keep on going. I don't hear republicans clamoring for price controls, do you? If you don't think increased wages stimulate the economy then why did Bush send all of us a check right after he was elected? Why did Bush cut taxes to stimulate the economy? Cutting taxes is the same as raising wages....it puts more money in the pocket. Cutting taxes to stimulate the economy takes money out of the govt. Raising wages stimulates the economy and increases tax revenues to the govt.