Originally posted by AwakeinNM
How will this affect the economy?
The cost will be passed on to the consumer, prices will rise, unemployment will rise as companies will have to lay off workers because their payroll
expenditures will be too high.
Rather than the market setting the minimum wage like it should be allowed to, the rest of the economy will be forced to move in an inflationary
direction to counter the imbalanced input forced into it. It is stupid, always has been.
Just another simple-minded idealistic effort by stupid liberals to level some imaginary playing field they think is "unfair".
No the market doesn't correct because the market isn't what's causing the inflation. The inflation is caused by the Federal Reserve and Government
interference on purpose. Therefore it can only be fixed by Government interference on purpose. Our interest rates aren't set by the market right now.
They're set by the fed and that's what causes the problem.
The economy is supposed to have some inflation to make the whole thing work. It's designed into the system on purpose. The inflation is supposed to
make prices rise.
Yes we're complaining that prices will rise, but that's what's SUPPOSED to happen. That's how the system was designed to work. If they don't rise,
we'll have deflation that will lead to an economic crash. That's exactly what you don't want.
Except if we let the market take care of it, the business, since it's competing with other business will try to keep its prices low. To do this they
will screw the employee who has much less control over the situation.
The business will try to skirt their inflation tax by never giving the employee a raise. That's not how it's supposed to work. What's supposed to
happen is that as prices rise, wages rise also and they cancel each other out. I pay you more, but I'm charging more. Since you're getting paid more
you can pay me more when you buy my product. Then it all evens out.
This makes borrowing money easier and cheaper. But it's not a perfect system. Some bosses will try to take the slack out of their employees instead of
their customers, but that doesn't work. So every now and then the Government has to come in and make a slight adjustment and make sure the inflation
is going towards the prices where they're supposed to go and not the employee's wages.
It's just a slight tweak. Nothing other than that, and it's been working for a very long time. Prices rising at a slow steady rate is a good thing.
That's what's supposed to happen. Sometimes the gov has to make sure the wages are coming along with it.
After all, keeping your employee's wages low when they would have normally gotten a raise is still a form of inflation. It's just coming out their
check instead of going towards prices. However, the difference is the employee has no choice. However if you do it the other way, and prices go up to
much, then the employee has some choice in the situation. The employee can say, well you know what? I'm not gonna buy that. I'll look for it cheaper
edit on 8-6-2012 by tinfoilman because: (no reason given)