>People that do not understand basic economics: "RAISE THE MINIMUM WAGE!"
>People that do understand basic economics: "Please don't..."
Do people really not realize that, if minimum wages go up, everything will just get more expensive as businesses push that higher expense onto the customer?
@finlaydag33k That's not the main picture though
If you fix prices up you end up with a surplus
People get fired and overworked to absorb the diminishing returns of labour, and pricier (at least in the short term) alternatives are picked, but most of the impact is absorbed by layoffs or dodging it altogether by lowering other forms of compensation
@applejack If you fix prices, you end up with a surplus if there is competition that gives (roughly) the same product but at a more affordable price.
However, if all places suddenly increase prices (which is bound to happen when you increase the minimum wage, because everyone along the supply chain asks more money), then that competition won't be there.
So in the end, there would be two scenarios:
- Businesses cut into their margins (not gonna happen).
- Costs go up for the consumer.
And yes, businesses can also offset this a bit by laying off people and/or lowering other forms of compensations (like employee benefits) altho depending on the business, this is also less likely to happen than just raising prices.
But in the end, just raising minimum wages, won't do much except likely causing problems to get worse, especially for those that do not have a high income to compensate for it.
@finlaydag33k The alternative to low-paid labour is slightly less low-paid labour, or in some cases tech
They are being payed little because they are not worth much, they do not span the whole supply chain. It is not loggers or factory workers earning minimum wage, it is retail and fast food clerks
Nobody needs 6 people waiting tables rather than 5, maybe you can even get away with the best 3 and self-order tablets. If you have 6 employees being payed €10 and then 5 being payed €12, you pay no extra while losing relatively little due to the diminishing marginal returns and because you fired the bottom rung
Prices are how capitalism performs economic calculation. Calculations do not change on edict. Of course it makes problems worse 
