Comment by jillesvangurp | Hacker News Reader

Comment by jillesvangurp | Hacker News Reader

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Germany actually just introduced minimum wage a few years ago. They did not actually have this. Their unemployment rate is at an historic low. So the arguments used against that here did not quite pan out either.

But of course Germany was a bit of an anomaly in Europe: this stuff is old news to most of the rest of Europe.

Regardless of ideology, the debate seems to be about the cost of minimum wage (especially on the right side) and not really about the benefits. The benefits of not having abject poverty in your society are many. Minimum wage is an important tool for that. Regardless of your position on this, you'd have to consider both cost and benefits for any analysis worthy of that word.

To name just one such benefit, people with disposable income tend spend that income on things. This is great for the local economy. So instead of funneling money up the corporate hierarchy towards off shore accounts, a second house for the CEO, or whatever, funneling money back into the economy where it actually gets used has an effect on that economy: it grows.

Seattle seems to be doing fine demonstrating that this works as advertised. More people can afford to go to restaurants so the restaurant business is booming. That should not be that surprising to economists.

> So instead of funneling money up the corporate hierarchy towards off shore accounts, a second house for the CEO, or whatever, funneling money back into the economy

I assume the CEO isn’t willing to generously give up their second house and will find a way to push this cost onto all consumers including those happily earning higher wages.

Is there a mechanism in place to prevent this?

The same mechanism that ensures that the local coffee shop isn’t charging so much that the owner has a second house in Bermuda — if you raise prices that much you won’t be competitive.

Obviously in an particular case, who knows? But in general I think the expectation is that the market will decide.

A minimum wage isn't one coffee shop with expensive beans. It means Every shop has expensive beans.

Minimum wage raises in America generally come out of the landlord's pocket, not the consumer's.

I’m not sure what your statement means. Can you explain what you mean?

Landlords have wide pricing power. They basically get all of the money. Rents rise until merchants make minimal margins. If the law says that wages have to go up, that depresses margins and therefore rents.

>will find a way to push this cost onto all consumers including those happily earning higher wages

I never understand this argument. Those happily earning higher wages are already planning on spending most of those wages. The resulting increase in sales should already cover much of this cost, price increases aren't the only way to generate more revenue.

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