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Costs can’t increase if wages stay the same.
Material costs, property taxes, fuel/electricity costs, insurance, maintenance, etc can increase while wages remain stable. The product cost goes up, by wages don't. In addition, inflation impacting the purchasing power of the dollar drives prices up across the board. All the money spent by Govt beyond taxes collected (deficit spending) increases the dollars in circulation, driving prices up - more money chasing the same number of available product. If the company buys product from other countries the exchange rate can fluctuate driving cost in USD up or down.
Wages are generally a response to higher costs and not the driver, though over time a feedback loop can make wages a bigger component of inflation. Artificially increasing minimum wage is not a natural thing and can help to drive price inflation in low wage reliant products - fast food, gas stations, merchandisers, etc. CA's increase from $17.50 to $22.50 is around a 30% increase and would need to be passed onto the customer, thus inflating restaurant pricing.
Product need consumers, you can’t sell gas for $5/gal if the average household is earning $200/year
Yes, if the end customer price increases enough, the lower income folks will find alternatives or do without. If the price increases too much, more people find alternatives or do without, the business sells much less product, further driving their prices higher to cover their fixed costs and cutting back on employees. It gets ugly and can become self reinforcing like during the depression.
The product cost goes up, by wages don't.
Not accurate. There are states with higher minimum wages than the National minimum wage. All of them have higher costs of living than states that only enforce the federal wage.
Consumer costs cannot increase if people cannot afford to pay more
Yes, if the end customer price increases enough, the lower income folks will find alternatives or do without.
Nope. McDonald’s would go out of business if they became too expensive for minimum wage earners to afford to eat there. Thousands of suppliers would go out of business if McDonald’s went out of business or couldn’t afford to buy their product. Oil companies would go out of business if thousands of suppliers no longer needed to produce their food.
This is billions, maybe trillions of dollars worth of enterprise that must keep their costs affordable in order to exist, and that’s just starting with one single corporation.
Inflation cannot exist [edit: beyond a certain extent, which we’re well past] if the end consumer cannot afford the increasing prices, and it flows all the way to the root of every supply/cost chain.
If there were no legal minimum wage, low-skill laborers would still be earning $0.10/hr and an iPhone would cost $9. It wouldn’t benefit Apple to produce a product so expensive that 90% of consumers couldn’t afford it, and it wouldn’t benefit apple’s suppliers to produce components so expensive that Apple couldn’t afford them, and so on ad infinitum. A phone is only allowed to cost $1200 because minimum wage laws make that a reasonable amount for a common luxury expense
Inflation cannot exist if the end consumer cannot afford the increasing prices, and it flows all the way to the root of every supply/cost chain.
Inflation can and does exist. Inflation to the extreme, when people can't afford to buy a product anymore, yes, that business is doomed. McDs will lay off employees, use robots and automation to circumvent wage increases as much as they can. Gasoline prices can go up due to raw material costs (crude oil), refinery costs, refinery capacity (same demand chasing less available gas drives the price up), overall inflation (wages, value of a dollar, foreign exchange rates though oil is currently priced in petrodollars), etc. When prices get too high, these business collapse, deflationary forces begin. Stagflation is when inflation occurs but wages don't increase, net effect is a loss of purchasing power, lower sales. Deflation is when you can buy products for less money in the future - people postpone today's purchases to buy it cheaper tomorrow. Good for the consumer but bad for businesses.
There used to be no minimum wage long ago. A low end job would be posted and a very low wage offered. If no one was willing to do the work for the wage offered, the owner would have to raise the offering until someone agreed to work for the wage. Some people were exploited, so our "benevolent" government decided to create an official floor for wage compensation. I can remember when minimum wage was $1.70/hr years ago.
Read up on Economics 101 to better understand how economies work. It will answer many your questions.
There used to be no minimum wage long ago. A low end job would be posted and a very low wage offered. If no one was willing to do the work for the wage offered, the owner would have to raise the offering until someone agreed to work for the wage.
Exactly, this is called the free market. A job must pay what society thinks it is worth to do that job. Minimum wage is the primary driver of inflation, because it is mandatory and not able to be organically established/enforced by the actual cost of living required by society
Some people were exploited, so our "benevolent" government decided to create an official floor for wage compensation.
This is wrong. You literally just explained that you understand that people will not work a job for less money than it is worth, an employer cannot “exploit” people with low wages. If the wage is too low, no one will work there.
You tell me to study economics 101 while spouting the deliberate falsehoods of early wages taught by a corrupt federal education system.
The “benevolent” minimum wage exists solely so that inflation can be driven at the rate it is.
It can’t be difficult to understand that there must be consumers for a product to exist. There must be a producer of that product in order for the manaufacturers of the components of that product to exist. There must be manufacturers for suppliers of raw materials to sell those materials. There must be suppliers of materials in order for people to mine or produce those materials. NONE of those can exist if the first one, a consumer with money, doesn’t exist.
So you have to believe one of two things: either producers at the beginning of a supply chain will do whatever is necessary to keep their costs within a range that allows the common end consumer to purchase any given final product, or virtually all products, housing, entertainment, and transportation would simply cease to exist if there was no minimum wage.
Hint: all of those things existed before the idea of a minimum wage existed.
Inflation requires spenders. Minimum wage increases spending ability. Minimum wage is the primary driver of inflation, because it is mandatory and not able to be organically established by the actual cost of living required by a society
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