I think what is more likely here is that businesses are betting that people will eventually burn through their savings and pandemic money and come back. It is a competition to see who remains solvent longer.

If the people and government really wanted to play hardball, we'd do something like a basic income. Then businesses would have to provide a working environment that people are actually willing to voluntarily show up to.

That’s a separate issue. Minimum wage increases won’t fix businesses that pay less than competitors while demanding more from employees.

If minimum wage is raised to $15, the better competitors will simply raise their wages to $18-20. This won’t come free, though, as prices will increase somewhat to compensate. Maybe not 1:1 with wage increases, but the second-order effects can’t be ignored.

Minimum wage isn’t really the issue (in this article). These people aren’t choosing to quit so they can sit home for $0/hour instead of $11/hour. They’re leaving for other jobs that already pay $15/hour.

I think we need to get more comfortable with the idea of market rate in action. It’s a good thing if employees are leaving underpaid, overworked jobs for better jobs. That’s the market in action, and the employees are winning. I don’t think government intervention would help, other than to maybe re-trap people into bad jobs if the bad jobs and good jobs are forced to pay the same and the market rate incentive for switching jobs is eroded away.

It depends on the scale of the 2nd order effects, and which 2nd order effects we look at.

Here these 2nd order effects are far lower than the effects of massive segments of the population living in poverty working full time jobs. The proportion of the pie going to labor vs capital has never been lower. Push that ratio back to rates more resembling the postwar multi-decade boom, and we'll see similar effects.

IOW, the inflation resulting from forcing non-poverty wages will still keep the market intact, good employers will still offer more and employees will move, but employees will also have funds to buy stuff and generate demand, which has been lacking.

Employees in the 1st to 3rd decile will have funds to buy stuff and generate demand. The 4th to 6th decile of income will have to cut consumption, however.

The deciles are of course made up, but my point is someone will have to cut down on consumption if others that were not getting a piece of the pie start getting it (unless the size of the pie gets larger at the same rate, but it will not in this case due to demographic reasons and the type of work not being able to be automated).

The minimum wage was originally designed in the 50s specifically to keep workers above the poverty level. It was often reset so that a 40-hour work week would keep a family out of poverty. This linkage was broken in the 1970s and the minimum wage stagnated for generations.

There were no such ill effects when the minimum wage was above the poverty level. In fact, there was decades of growth at all levels of the economy. One might also note that this was a time when the franchise restaurant industry first grew and thrived - with minimum wages above poverty levels.

Sure, wages might cause prices to go up, but it is nowhere near a 1:1 ratio, at the first order because front-line labor is simply only one component of the costs, among other major cost categories including capital expense, real estate costs, cost of goods sold, administration, sales & marketing, etc.. Even assuming that costs are evenly allocated across those 6 categories, doubling front-line wages would result in only a 16% increase in overall costs, much of which would not be passed on to the consumer, and which often results in a higher quality product or service from better paid workers.

The lower 3-4 deciles wiuld now have double the income, and multiples of that in increased disposable income, yet prices might rise 5-10% over the intervening years. The 5-7 deciles would barely reduce their consumption with a 10% inflation, likely far less than the 1-4 deciles increased and upgraded consumption, and the top deciles DGAF.

And aside from the beneficial economic effects, it is just the right thing to do, even if there are some minor costs. The idea that "you can't impose even a cent of costs on me to better everyone" is truly ugly. We live in a complex society, not some solipsistic universe solely for the benefit of "#1". Don't be that "#1".

I mentioned demographic reasons in my comment because of the decreasing birthrate. The birthrate in the 50s was much different than today, and the sheer momentum of demand caused by new, young people enter society can be a cause of economic growth (the "pie" increasing in size that I was referring to).

With the new parameters of an aging population, I think the situation may very well be different, and already has had an effect over the past 2 decades.

>And aside from the beneficial economic effects, it is just the right thing to do, even if there are some minor costs. The idea that "you can't impose even a cent of costs on me to better everyone" is truly ugly. We live in a complex society, not some solipsistic universe solely for the benefit of "#1". Don't be that "#1".

I also welcome a reduction in wealth/income inequality. I simply think a large part of the reduction will come at the expense of other deciles, which matters because it then affects politics. I actually think it is at the root of the political tension and tribalism in the country, because certain tribes are moving down the socioeconomic ladder relative to others.

TLDR Fatter middle class, thinner lower and upper classes.

It's tough on consumers too because we're used to a certain level of customer service, so we get frustrated when that's not what we receive for the same/more money than pre-pandemic -- perfectly human responses in the circumstances. Of course it's not on the actual workers, they're exhausted and giving all they have -- perfectly human responses in the circumstances. These are just symptoms of a more broken systemic environment.

[1]:imo there should be employment assurance, not insurance-- that is if you cannot find a job we'll give you one. instead of if you dont have money will give you some. Part of why I hold this idea is that if you have more money chasing the same goods you get inflation. At least if someone is working there is a chance they'll contribute to the collection of goods produced after which money will follow.

Raising the minimum wage is unlikely to have much of that kind of effect, since most people make more than minimum wage. What it does do is reduce the buying power of people making $30/hour because they now have to compete more often for things with someone making $15 instead of $10/hour. But even then, that isn't enough to put pressure on cars, houses, or even rent.

But what raising the minimum wage really does is put people at the bottom on a more equal footing with people not at the bottom. The people on the bottom can buy more, the people not at the bottom can buy a bit less.

All there hotels and restaurants and service sector businesses used to paying bottom tier wages to desperate workers are now relying on their “managers” to fill in the gaps, and the pay their “managers” $36k per year to work more than 40 hours per week.

People accept it because it is a more reliable wage than hourly which can go up and down, but it usually means you are working 50, 60, 70 hours a week for extremely low pay.

If you bump that exempt min wage to $100k or $200k per year, then the employer is forced to hire more people and reduce reliance on these desperate “managers”.

Unless those people's jobs evaporate because they become uneconomical for the employer.

The janitor in an NYC suburb who was formerly making say $14/hr will benefit from a $15/hr minimum wage. The guy who pushes a broom and delivers parts for $12/hr at a tractor dealership in the middle of nowhere will be in the unemployment line.

Minimum wage is a cudgel. It should be set at the city or county level (for a variety of reasons, the above being one), not the state or federal level.

Minimum wage is set at the state and city levels. The federal minimum wage is probably obsolete in about 90% of the country right now, perhaps close to 100% now.

I think it should be at least $100k if not far more, since a lot of employers rely on a couple of $36k to $50k employees who do not have better options in life to work 60 to 80 hours per week and on call to fill in the gaps caused by having a rotating, underpaid staff. They are “managers” only in the sense that they are on call and liable for jumping into work for whatever position is missing. They do not actually manage anything.

This is more a reflection of the growing class-based conflict in the United States and less a reflection of how income is distributed. The reality is that many people - especially tech workers - have insanely large impact compared to someone working a simple, local job. Pay will reflect this.