What I'm quite willing to acknowledge is that the buying power of the minimum wage should be at least five dollars higher. Yes, sure, hear hear! It should be. I just don't think increasing the number will accomplish anything but price inflation, and a gradual adjustment in the value of the dollar and wages across the board, until we return to status quo or worse.
Inflation is driven by the expectancy of rising wages, or price setting.
Price setting theory says, that as companies are setting prices (in expectancy of higher economic growth), trade unions, or the worker itself are going into salary negotiations, also driving higher salaries. As thats not what happened in the past 30 years (price deflation through globalization), we have to look at the other theory which says that growth expectancy is driving inflation. Issue - it has to be growth expectancy that lifts all boats, and that is sustained for that to happen. What you actually have seen is the opposite (two barista jobs to sustain...), so its actually become harder to keep an inflation target of 2% ("or higher").
See:
https://www.bbc.com/news/business-53933239
US historically:
https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi
What essentially is happening is, that the money pumped into the economy is centralizing pretty quickly, without it making much impact on the 'real economy'. (More money is made through financial speculation, or investments in foreign developments - so what ever you pump in, doesnt end up with workers or employees - therefore no exploding inflation.) The rich become richer, but they cant spend gains on consumption (another boat?), and they wont invest in ventures in your own country that would allow workers and employees to parttake in growth expectancy (= you dont need most people, which is why you make sure you are employing more and more folks in a service economy close at the minimal wage level and have millennials spend what they earn on consumption and not their future). So higher inflation isnt happening so far - instead, everyone got kind of afraid of revolts in the US, because perceived quality of living declined.
"But state printed so much money into the crisis -" Yes, and that either ended up with corporations that wont invest into growth because of it, and people, that consumed it away - during a period, where consumption was way down - because of covid. If it would end up with common folks in mass - there could be inflation expectancy - but it isnt.
On the minimum wage is bad point. FIrst - purchasing power parity of 5 USD is coocoo.
Wages at the 90th percentile increased across demographic groups, ranging from rates of 14.0% (Hispanic workers) to 70.6% (women). Overall, wages at the 90th percentile increased from an estimated $39.14 to $55.29 (a 41.3% increase) over the 40 years between 1979 and 2019, but the growth rate was not constant. After increasing by $5.10 ($39.14 to $44.24) over the 20 years from 1979 to 1999, wages at the 90th percentile grew by an estimated $11.05 over the 20 years from 1999 to 2019. 12 Median wage trends were not uniform across demographic groups, with wages decreasing for some groups (e.g., men and Hispanic workers) but increasing for others (e.g., women). Overall, median wages increased from an estimated $21.14 to $23.00 (a 8.8% increase) over the 1979 to 2019 period. Wages at the 10th percentile followed a similar pattern (i.e., declining for men and Hispanic worker groups, but rising for others). Overall, wages at the 10th percentile increased in real terms from an estimated $11.27 to $12.00 (a 6.5% increase). To explore how real wage trends evolved over the 1979 to 2019 period, Figure 1 shows annualized wage growth rates over various time periods (roughly a decade each) by wage percentile and demographic group
src:
https://fas.org/sgp/crs/misc/R45090.pdf
90% percentile means - you scored better than 90% of the population.
So - the income for the lowest 10% of society actually was stable at 12 USD (purchasing power, so inflation adjusted) for the past 40 years - while GDP grew 8 fold. And prices 3 fold (
https://www.worlddata.info/america/usa/inflation-rates.php ). (Actually looked up those numbers) - factor out price increases (8 divided by 3), and the poorest 10% are 2.6 times poorer now than they were in 1979 - if it werent for lower prices on imported goods of daily life. And lower production costs.
Thats trickle down economics. But also thats globalization. (Average prices for goods come down, you get richer because more people can buy them - at the same time your markets increasingly become global - on which you are not paying taxes - and you certainly arent paying your workers more - so the lowest 10% of society (income wise) get nothing of the growth you produced, the middle class (median wages) get nothing of what you produced, and the top 10% get an increase in earnings by 43%. Purchasing power adjusted.)
Do you now understand, why "inflation" (everyone has more money to spend, so prices increase) isnt what everyone is worrying about?
Second point. Raising minimum wages forces factory owners and companies to innovate - (watch Peter Zeihan on Citrus growing
( h**ps://
www.youtube.com/watch?v=NLKbn8IeNTk ) - "You will not get any more cheap labor.") to be able to pay them - for the first time in a long time, actually creating growth dynamic, where investments would be made domestically as well -- if you would actually call BS and move all your investments to foreign territories, "because thats outrageous" you now get hit by minimum taxes (
https://economictimes.indiatimes.co...-companies-countries/articleshow/82070767.cms ) and you've put yourself in a downward spiral - because it becomes that much harder, to do research and development in developing countries. So essentially, you are killing your business within your lifetime - and thats not taking into account, that you might be "out innovated"..
So thats the pro argument for a higher minimum wage. (Way above 5USD purchasing power adjusted, btw - because f*ck you, work with real numbers for once and not just with misantrop "what I think must be enough to sustain" figures of your imagination.)
Counter argument - you cant do that currently, because you are coming out of an acute crisis. So raising minimum wage means, the companies that dont make it shed employees, which is the opposite of what you'd want to happen currently. So thats not happening anytime soon - and you have to find other cogs to turn to get to the same result. (In this case, global minimum tax, and infrastructure investments in the US -- which also should lead to an innovation push within the US --
whats left is the issue, of 'where the low skilled workers are' once infrastructure spending (state money) runs out. And if companies havent found a way to upskill or integrate them in their "growth story" - you'll have issues.
Or you need to talk more about "automation taxes" - and universal basic income, which imho is not the best way to go -)
Whats entirely bonkers in the current situation is to proclaim, that the influx of low payed workers is your problem (do you want to work as orange pickers?), or to tell everyone, that lazy people that are living "too good" on minimum wages are the problem.
Also you cant just destroy globalization and call it a day (then everything would be produced in the US again!), because that would topple the economic system. You can set the incentives differently and get people to invest in the US again - but that also takes state money (structural investments). If you'd only work with "whips" on investors - that might increase the "f'k you" factor..
So you work with both. (Incentives and taxes.)
Also kind of by now - corporations have realized, that the whole story has reached people, so they might either invest in racial revolts to keep them occupied (
) or try to do something about it - because an entire generation is starting to believe more and more, that capitalism isnt working for them anymore..
(So what you usually do as corp is to tell people "everyone can become app millionaire" and call it a day. (New innovation field ("its now become accessible to more people"), with new _global_ growth dynamics, where you can siphen off money on structures up top ("we provide the Amazon Web Storage and computing"). For it to become a little more just, usually you need state involvement. The diversity play - largely is there to be sure to make products and services, that also could scale in India, and with women in india, and... so thats also a proposed growth driver.
But then overall you might need consumption reduction, because of climate change and stuff..
Now square that circle..
)
