McDonald’s menu 70 years ago [462x648 - 291KB]

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In the old days of free capitalism, there was no unemployment insurance, no welfare, nobody but the church to help the downtrodden. You want to eat, you had to find work, unless you owned enough land for a self sufficient farm. There was no work for many during the depression, food lines were established to feed the hungry in the cities. Jobs were crested (Hoover Dam and many other huge government projects) to get people working and improving skill levels, to get more $$$ into the economy and to help reduce/eliminate deflation. Today we have a minimum wage floor, and that wage may be sufficient to feed, clothe and house someone, but is not guaranteed to be enough. People have to make due with what they earn. Eating at home, buying used clothes, having roommates to split the rent - or moving back home, public transportation are ways to reduce the cost of survival. Welfare was created because people were still falling in the cracks.

Semiconductor wages in my backwoods area were roughly 65% of the wages for the exact same jobs in California. Housing costs and state taxes were the biggest contributor. My commute to work was +/- 30 minutes here, my counterparts in CA complained of up to 2hr commutes each way, because housing was unaffordable closer to their work.

Rents are interesting, usually defined by a formula based on purchase price, taxes, upkeep amortized over a period of years, but demand (or lack therof) can drive rents up or down from there. People who have lived in an area all of their lives can get priced out of a community if it becomes a hot place to live. More money chasing an existing housing supply in an area drives the values up, taxes and services up. Think Washington DC area. Conversely, a city that increases taxes to the breaking point can drive the wealthy and their businesses out, increasing unemployment, reduced wages (same workforce chasing fewer jobs), rents drop, malaise increases ... think Detroit.

The economy is in for a rough ride in 2023.

In the old days of free capitalism, there was no unemployment insurance, no welfare, nobody but the church to help the downtrodden. You want to eat, you had to find work, unless you owned enough land for a self sufficient farm. There was no work for many during the depression, food lines were established to feed the hungry in the cities. Jobs were crested (Hoover Dam and many other huge government projects) to get people working and improving skill levels, to get more $$$ into the economy and to help reduce/eliminate deflation. Today we have a minimum wage floor, and that wage may be sufficient to feed, clothe and house someone, but is not guaranteed to be enough. People have to make due with what they earn. Eating at home, buying used clothes, having roommates to split the rent - or moving back home, public transportation are ways to reduce the cost of survival. Welfare was created because people were still falling in the cracks. Semiconductor wages in my backwoods area were roughly 65% of the wages for the exact same jobs in California. Housing costs and state taxes were the biggest contributor. My commute to work was +/- 30 minutes here, my counterparts in CA complained of up to 2hr commutes each way, because housing was unaffordable closer to their work. Rents are interesting, usually defined by a formula based on purchase price, taxes, upkeep amortized over a period of years, but demand (or lack therof) can drive rents up or down from there. People who have lived in an area all of their lives can get priced out of a community if it becomes a hot place to live. More money chasing an existing housing supply in an area drives the values up, taxes and services up. Think Washington DC area. Conversely, a city that increases taxes to the breaking point can drive the wealthy and their businesses out, increasing unemployment, reduced wages (same workforce chasing fewer jobs), rents drop, malaise increases ... think Detroit. The economy is in for a rough ride in 2023.

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[–] • 0 pt

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You want to eat, you had to find work

And how many people do you think took jobs that didn’t pay them enough to afford to eat or pay rent? Why would anyone take that job? If we suddenly abolished the minimum wage and Walmart started hiring for $0.10/hr, how many people would apply? Zero. An employer could exploit exactly zero people with an unfair wage just because the government stopped regulating it. Better to be free on the streets homeless and starving than working 40 hours a week and homeless and starving. A legal minimum wage is not required to keep people from working jobs that don’t pay what they need.

Social safety nets are irrelevant to how minimum wage affects inflation. Taxes and other government overreach is also a different conversation, though I do agree that they contribute to cost of living. Yet again, forced increase of wages increases the government’s ability to collect more taxes

Semiconductor wages in my backwoods area were roughly 65% of the wages for the exact same jobs in California.

Yes, again, exactly. The wages for the job are set by what is required by the surrounding society. All wages also increase when minimum wage is increased, which furthers spending ability, which speeds up inflation.

If someone was working as a mechanic for $15/hr when California increased minimum wage to $15/hr, why would they keep that difficult job if they could just throw boxes onto a shelf and take home the same money? So mechanics now make $30/hr. Now why would someone invest thousands of dollars and years of their life to learn a programming trade that pays $30/hr if they can just immediately enter any other trade for $30/hr? Programming jobs have to pay more because the minimum wage increased. The treadmill continues all the way up, and each industry along the way has to increase its prices to compensate for the wage increases.

California can only charge the rent and taxes that it does because its higher minimum wage has driven up the wages of higher skilled industries. If the wages were not so high, nobody could rent or sell their property for as high of a price, and prices would collectively lower. Exactly the same thing happens with product costs.

Minimum wage => inflation

>You want to eat, you had to find work And how many people do you think took jobs that didn’t pay them enough to afford to eat or pay rent? Why would anyone take that job? If we suddenly abolished the minimum wage and Walmart started hiring for $0.10/hr, how many people would apply? Zero. An employer could exploit exactly zero people with an unfair wage just because the government stopped regulating it. Better to be free on the streets homeless and starving than working 40 hours a week and homeless and starving. A legal minimum wage is not required to keep people from working jobs that don’t pay what they need. Social safety nets are irrelevant to how minimum wage affects inflation. Taxes and other government overreach is also a different conversation, though I do agree that they contribute to cost of living. Yet again, forced increase of wages increases the government’s ability to collect more taxes >Semiconductor wages in my backwoods area were roughly 65% of the wages for the exact same jobs in California. Yes, again, exactly. The wages for the job are set by what is required by the surrounding society. **All** wages also increase when minimum wage is increased, which furthers spending ability, which speeds up inflation. If someone was working as a mechanic for $15/hr when California increased minimum wage to $15/hr, why would they keep that difficult job if they could just throw boxes onto a shelf and take home the same money? So mechanics now make $30/hr. Now why would someone invest thousands of dollars and years of their life to learn a programming trade that pays $30/hr if they can just immediately enter any other trade for $30/hr? Programming jobs have to pay more because the minimum wage increased. The treadmill continues all the way up, and each industry along the way has to increase its prices to compensate for the wage increases. California can only charge the rent and taxes that it does because its higher minimum wage has driven up the wages of higher skilled industries. If the wages were not so high, nobody could rent or sell their property for as high of a price, and prices would collectively lower. Exactly the same thing happens with product costs. Minimum wage => inflation

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