Do prices and inflation actually go up when the min wage increases.
By - AlwaysPixel
You should ask this on r/AskEconomics this sub is more so for virtue signalling or grifting
You will get braindead answers which are overly complicated and confusing from r/AskEconomics
Obfuscation is the name of the game there so that no one feels wrong.
There's always the option to ask for clarification. Also if you have any better recommendations let us know so that we too can get clearer answers
… so you just don’t understand the responses? r/AE is the best source for general economic info and Q&A on this website.
This specific question is answered in the r/economics sidebar though.
In those industries affected by minimum wage? Yes.
I took a course which covered minimum wage policies and to my memory, most of the studies we covered the issue was more on whether employment was affected. I think most of the studies saw some increase in the output prices in these industries when price was studied.
Which industries are those?
I think fast-food was one of them. Don't know about others.
Those who use ~~slave~~ cheaper underage labor like McDonalds for example
Minimum wage salaries are only a portion of the jobs in the market. So their effect on prices is also limited.
Most of the literature talks about employment levels since raising minimum wage usually makes it harder for small businesses to compete due to higher costs, where they end up decreasing their demand for workers
There is a constant debate whether raising minimum wage is good or bad for the economy. I would argue this discussion will keep going and changing as robotics will replace human labor and discussions on basic income will increase
How about a skilled job making $15 an hour, but then the minimum wage is raised to $15/h too. Is the skilled labor now worth the same as a fast food worker? Assuming the skilled workers demand a raise, it seems like the market outside of minimum wage labor are now also affected.
Well if the supply and demand of skilled workers meet at 15$ , regulation on unskilled workers won't neccesarily tip it.
It logical to assume that some skilled workers will prefer an "easier job" and decrease skilled workers supply, or will "get upset" and quit, decreasing supply as well. Which in turn might raise the salaries of the skilled workers.
Here is another example for perspective - Hi tech growth increased the salaries in say San Francisco, in turn increased the demand for wood floors, and now it became super expensive to build a wood floor, simply since the unskilled worker who builds wood floors is in high demand and can charge 1500$ a day. now an unskilled worker can earn as much as a programmer in this area. Will it affect the salaries of more experienced workers? yes and no... lol
In a theoretical sense, absolutely.
If you raise all wages, you increase prices of anything that requires labor inputs.
For a rough estimate of what a minimum wage increase would do to prices in the U.S., not counting biases towards inferior goods or wage adjacent increases for instance, take all the full time minimum wage earners from the BLS, multiply them by their annual earnings, and divide that by the US GDP. Its a small percentage of all the goods and services being produced and sold in the US. Then add 10%, 20%, etc to the minimum wage and see what the percentage difference is to the GDP... this gets warped the further you increase the minimum wage though as you begin to usurp more wage earners that would then also have to be included in your total annualized wages as compared to GDP. ... but its fine for any increase currently on the table by anyone of any political relevance.