Is raising the minimum wage a sneaky way to also raise the tax on capital gains?

[kurtcagle]

3. Of course it is

Stock dividends and minimum wage have an inverse correlation - when minimum wage rises, corporations have to spend more money on staff, which reduces their overall profitability and, by extension, the size of their dividends. It doesn't really matter that more people can buy the product that these companies make, primarily because sales profit over earnings (P/E) actually has contributed less and less to the perceived wealth (and hence dividends) of a company in comparison to a company's stock value (which is actually more loosely correlated). That's how you can have tech companies with insane valuations despite having net negative profitability.

Notice also that when minimum wage issues come up, the story is always steered towards service workers at restaurants, because those typically are perceived as independent small businesses (with the inevitable hand-wringing on the part of the manager who really wants to pay workers more, but their bottom line is barely in the black). The reality is that most minimum wage workers work for companies that are chains that employ them as fast-food workers, stockers, cashiers, hotel staff, etc.), and are large enough that they DO pay very healthy dividends. They also tend to be the ones that fight the hardest whenever it looks like minimum wage is going up.