General Discussion
In reply to the discussion: "$15/hr will kill small businesses" is this true? [View all]ProfessorGAC
(64,988 posts)If MW goes up to $11, then $13, then $15, the bigger companies are going to be $3-5 ahead of the curve.
Just like now.
Will some tiny outfits with razor thin margins fail. Probably.
But, the demand for those goods & services won't evaporate. So, other companies will expand to meet demand. Therefore, the job impact approaches net zero in the short term.
As more people have that usable income, demand rises and even more people are needed to meet demand. Jobs created.
Remember, this argument is the go-to for the same people who assumed us low taxes on the very rich & companies leads inexorably to economic growth.
They were wrong in the 80s, the aughts, and in 2017.
They also told us that prosperity would trickle down all 3 times. They were wrong, wrong & wrong.
Both of these arguments are based on 2 dimensional thinking. X therefore Y. However, in a large economy there are dozens of Xs, leading to multiple Ys. And many of the Xs are interactive with other ones, or more than one.
The economy does NOT work as a X v. Y construct.
Any argument that requires that simple relationship is very likely fatally flawed.