"talks for a massive federal minimum wage increase means further sending people into poverty by destroying the value of what small savings anyone on the bottom might have."
This statement is only true, and then only formally, if you limit yourself to considering first order effects. The distributive effects of minimum wage policies will alter final consumer demand, which will have an impact on capital structure and demand for labor. Formally speaking, the overall effect on any given worker depends logically on elasticities of demand for different consumer goods and labor.
But most people don't care about the "Econ 101" model because they (rightly) suspect that it covers a special case that isn't relevant to real-world decision making. Econometric research paints a much more complicated picture.
My argument is that the __buying power__ should be increased, by forcing the market to have more of what people need. (I.E. more housing so housing actually becomes affordable)
That would also help out the middle class, rather than trying to lift the tide without building more high-ground docks.
You're fair to argue that it's immoral; I'm agnostic on the idea. Though I'm not sure that Economics has much to say about it.
As for whether it's destructive, I used to strongly believe so.
Now I believe that, as long as there is unemployment in the system (and my understanding is economics tells us that there will ALWAYS be unemployment), the lack of an adequate wage floor will always result in a race to the bottom and a drag on wages.
In the minimum-wage-adjacent pay rates, you might have double the potential workers than the number of workers actually hired. There is therefore zero incentive to offer additional pay for additional productivity at that wage tier, because the employees can simply be replaced (yes, at some fixed cost).
“and my understanding is economics tells us that there will ALWAYS be unemployment”
Will there? In my state just a couple years ago traditional minimum wage jobs could not be filled. State minimum wage was around $7 an hour and every fast food restaurant and grocery store had big signs out front offering $11 or $12 an hour.
In general, it would seem that if everyone was free to offer work at any price, and everyone was free to accept work at any price, yes, some very low value jobs would race to the bottom, but those would be jobs that don’t even exist right now due to minimum wage laws. Many more people would be able to get at least some job, and in many cases wages would naturally go up without the need of government coercion.
Exon 101 is a political argument not a scientific one. There are more than 9 schools of economics all disagreeing with each other. Whatever Economic 101 you are taught depends on your country/teacher/power structure etc.
This statement is only true, and then only formally, if you limit yourself to considering first order effects. The distributive effects of minimum wage policies will alter final consumer demand, which will have an impact on capital structure and demand for labor. Formally speaking, the overall effect on any given worker depends logically on elasticities of demand for different consumer goods and labor.
But most people don't care about the "Econ 101" model because they (rightly) suspect that it covers a special case that isn't relevant to real-world decision making. Econometric research paints a much more complicated picture.
https://www.theatlantic.com/business/archive/2017/01/economi...