What happened when they raised the minimum wage locally where I live? All of the prices went up and people's hours got cut. In the end the raise in minimum wage was cancelled out by the price increases and people working less hours. So it turns out they had less money in the end compared to before the wage increase.
I however think Biden will give the money he takes from the rich to the poor as I'm sure he'll sign a few executive orders himself, but like that kick ass song I linked to what happens when the people you're taxing don't have any more money because you took it all?
What happens then?
I think anyone from Cuba or Venezuela should chime in on this one.
You stick to income taxes and percentages, that way money never runs out..
Also there is no incentive for 'all the prices to go up. If they do, you dont have a functioning market system anymore, you basically have monopolies that can dictate price structure.
Lets look at this from the perspective of a goods producer that produces a high priced good. His incentive is not to raise prices, but to keep them as low as possible to gain more customers, so they can grow.
Where you'd want to raise prices, if you can, is goods of daily importance. Food, housing prices, ... But if you can, that means that people in that market are colluding, because any competitor in the field could aim for a higher market share, by keeping prices low. Which in the long run is much more valuable (gradual price increases possible on more people).
In my country food prices are a good bit higher than the ones in our neighboring countries, which tends to eat up minimal wage increases eventually. But that money doesnt vanish, but aids local food producers f.e.
What you do in practice is, to raise the minimum wage 'more' to a point where peoples costs of living has no opportunity to eat it up immediately. That way a higher subset of industry benefits.
Gradually this will be eaten away by pricing on necessary items of life (inflation), but what you get out of it is the following:
1. One time effects of a stimulus for local industry
2. Innovation drive (because in order to stay competitive, you have to become better, to still be able to pay wages).
People working less hours makes no sense, because thats either the sign of a 'death spiral' for an industry (we cant pay, we cant produce, we cant sell that much, ...), in which case good bye 'not a viable business model', or the admission, that they hired workers, just to have them stand around and do nothing. So both arent that likely.
Why you dont do it more often, has to do with trends in the housing markets and trends towards automation, and globalization. Its hard to combat those.
But the idea is not that you let yourself be stuck in a 'no development needed/viable' loop forever.
Because that way you structurally are only increasing the margins of industry owners. Who can elongate production schedules without increasing investment, save up more, and then invest in automation either way. So you only give to the rich if you stick to that model.
Their comeback then is, but do you really want to loose jobs, because at some point we'll invest in more automation, or go out of country.
Their argument is not - well, then we'll become bankrupt. Because that would mean, that their business model is not viable at 'minimum wages' which, if you have to admit would be quite the reputation loss..
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At "people work less hours" as a result of it. This generally means that they work less overtime, because those measures (minimum wage increase) should be coupled with an incentive to hire more people - if you do them today. (So state is expected to get more money through consumption taxes, gives it back to industry - if they are hiring more people (investing in something that produces jobs).
(edit: Actually the opposite trend also would be likely. People work more hours, because less people get hired, IF your industry actually has no 'developmental perspective'. (Costs of new workers rise, if not offset by new incentives given by the state to boost new investments. So you let your actual workers work more - to stay competitive. Which only is a short term solution, because if your competition is hiring, while the state is incentivizing innovation, while you are doing nothing....))
If none of that worked, where you are coming from, what happened more likely was, that you had a very low minimal wage increase that was used to signal 'we've done something', and then to signal 'look it didnt work'. But if done correctly it leads to desired effects.
You can play the 'I dont want for things to change' game all your life, but in the end it just benefits people wanting to 'stretch' their return of investment. (Stretch the investment part, keep the return.)
Wages in the western world stagnating is THE problem of current generations.
To which the response then is, but look at all the cheap TVs you could buy. And the cheap smartphones - which just doubled in price. Because we produced in China, isnt that great? To which the response rightfully to an extent is 'f*ck globailization'.
But actually 'f*ck the distribution of gains in globalization', so 'f*ck the rich'.
(Because globalized workflows lead to better efficiency (specialization possible). When they work.)
Of course that only makes sense, if you believe in economic growth in the future..
(Which in the end you always do. If you are a globalized rich person. You might want to invest in 'lets lower our living standards, yay!' movements to not have to change your businesses for a while longer though.
Which coincides with the green/carbon neutral movement, if we dont form it to be a net 'innovation driver', which - to be honest is freaking hard to do, because you try to replace the 'efficiency' of oil at the same time).