Can someone answer my question about the minimum-wage hike?

[eniwetok]

64. just because something's plausible

The reason a higher minimum wage doesn't kill jobs (at a macro level) Is because jobs are created by people spending that additional cash.

The folks who are getting minimum wage are living (barely, if that) paycheck to paycheck. Every additional dime that comes in, gets spent. (As opposed to people who make more than they need to spend immediately.)

That creates "demand" in the economy. Demand for more goods and services. Which needs more people to produce those goods and services.

Just because something's plausible doesn't mean it's connected to reality. It can be just another monetary perpetual motion scheme. Thom Hartmann used a similar rationale for a 55 retirement age... that the labor shortage it would create would boost wages and workers would pay more into SS to cover the extra costs of those extra people on SS.

Right!

The simple fact is there's NO guarantee those bigger paychecks will recirculate in town creating more demand to offset the extreme increase in wages. And as money is drained away from that ecosystem... because people pay down debt, buy from Amazon or save for retirement... businesses might just as easily cut hours and lay off workers to compensate for the higher wages. They may automate if they can.

There's no free lunch and as the old saying goes... if something sounds to good to be true...