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Politics : The Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (4851)	1/9/2017 12:50:45 PM
From: TimF	Respond to of 356053

Mike Jacobs, owner of a Wetzel’s Pretzels franchise in Concord’s Sunvalley Shopping Center, told KQED that the increased business can be attributed to the fact that his customers are making more money. That's very unlikely. Not that he said it (he probably did, I'm not accusing anyone of fabricating the quote), not that he believes it (he likely does, and I certainly wouldn't claim he's lying), not that he's making more money (again I'm not accusing him of lying), but that the reason was that people are making more money. It could possibly be the case, for a specific business, if the potential customers affected by the increase have a very high propensity to spend the extra money* on that specific business. But you would not generally increase real business profitability by increase compensation to employees. Overall the cost would be higher than the businesses could get from the extra income. People's marginal propensity to consume would not exceed 100%. * - If there is any extra money. It can be the case that the lost income from job losses exceeds that gained from additional wages so the "extra" income is negative, but it doesn't have to be that way.