>>>Yes, raising minimum wage will make a minor increase in unemployment, and will make a bit of hardship for a very small number of restaurant owners, those are valid points, that in my opinion are not terrible enough to keep the minimum wage low.
Whats your plan for handling the resulting inflation, and the 2nd-order impact that rising prices has on both people on fixed incomes (retirees) as well as savers (destroying the long-term economic power of frugal citizens).
Also, below is a paper from 2014 that studied OECD economies and concluded minimum wage hikes cause unemployment, with their model predicting $10->$15 hike would result in a 3% unemployment increase. But hey, studies can manipulate the data to prove what they want. Check out the 2nd link to the SF Federal Reserve, which comes to similar conclusions.
Retirees and savers are not entitled to below market labor rates (nor interest rates high enough to live off of savings and investments [1] [2]). Save more and/or get a job.
Unemployment is at its lowest in 50 years [3]. This would be the ideal time to implement minimum wage increases, so any workers let go are reabsorbed into businesses that can pay the new minimum wage (while those that can’t go out of business). "Creative destruction" and all that jazz. The more disposable income minimum wage earners have, the more mobility they'll have, and with it the ability to move to locales with better housing affordability.
The Fed can’t generate a small bit of inflation with trillions in quantitive easing and holding interest rates down (and as a side note, the president of the Federal Reserve Bank of Minneapolis has even said "Pay more" to attract the workers needed [4]); raising the minimum wage is unlikely to cause inflation any appreciable fashion (compared to existing housing and healthcare market dysfunction).
Previous HN thread 15 days ago [5], with WSJ article showing the federal minimum wage bump to $15/hr can be implemented with little downside, along with the CBO report the article is based on [6].
In a well functioning market, inflation is purely a monetary phenomenon, raising the minimum wage should not affect it.
But you're right, rising rents are likely to capture much of the gain in the lower class. But that's because the rental market is not a well functioning market.
Rising rents should encourage more apartments to be built, stabilizing prices. Instead, NIMBY rules prevent them from being built, allowing rents to soak up all the gains.
How do you fix it, except dismantling democracy, simply sending unhappy locals NIMBYsts to gulags, or dismantling the capitalism, making the Valley just as unattractive as any other place? We had both of these in the Soviet Union and it didn't look nice.
But they are created at the will of the people, who live in those cities. They can't afford these rules to be broken - they will literally lose their life savings, their retirement, everything, if the housing cost drops. They would vote for everyone who promises to do exactly one thing: prevent any new residential construction around, and prevent (meaningful) mass transit from being built. Because both things depress their home values.
No other way around it except destroying democracy (or hollowing it out, when you vote but it doesn't matter, Putinist style), or destroying capitalism.
These things are just healthy signs that both capitalism and democracy actually work in your place, and are not fakes.
Whats your plan for handling the resulting inflation, and the 2nd-order impact that rising prices has on both people on fixed incomes (retirees) as well as savers (destroying the long-term economic power of frugal citizens).
Also, below is a paper from 2014 that studied OECD economies and concluded minimum wage hikes cause unemployment, with their model predicting $10->$15 hike would result in a 3% unemployment increase. But hey, studies can manipulate the data to prove what they want. Check out the 2nd link to the SF Federal Reserve, which comes to similar conclusions.
[1]https://www.lifescienceglobal.com/pms/index.php/jrge/article... [2]https://www.frbsf.org/economic-research/publications/economi...