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10 sats \ 4 replies \ @Skipper 4 Jan \ parent \ on: Help me understand minimum wage logic better econ

if you increase the minimum wage, companies will increase the prices, and the middle class are the ones getting rekt, because their wages will almost universally never increase at the same rate

the main issue here is money printing, that's why inflation exists. if we didn't had inflation the minimum wage didn't need to increase

this is economy 101 bro

33 sats \ 0 replies \ @stack_harder OP 5 Jan

i can tell you that as someone working freelance, I certainly have not been able to almost double my earnings since 2021, and my purchasing power keeps heading down the toilet (thankfully i never neglect my stacking as this is the only thing going in my favour), because of the endless minimum wage jackings the mandatory monthly contributions have also doubled (which doesn't benefit me as i you have to pay private if you want any level of service anyway).

Now you could just say fuck off and get better at marketing, fair enough, being self-employed is its own thing with its own pros and cons, but normal shop workers and people in the private sector aren't getting their wages doubled in 5 years either.

I think the Scandi model is better where unions do the negotiating and if you never bothered to learn or go to school, or train, you can have a rep fight your case as to why the state should be paying you 500 euros to push a broom around.

0 sats \ 2 replies \ @Solomonsatoshi 4 Jan

If companies could increase their prices, they would. What limits them is competition and demand level for what they offer. An increase in their costs such as an increase in the minimum wage does not automatically enable them to increase prices. This is Econ 101 bro.

32 sats \ 1 reply \ @Skipper 4 Jan

the number 1 goal for companies is: maximum profit

when you force them to pay higher minimum wages, do you honestly think they will absorb that extra spending and reduce their profits?

of course not, they will simply increase their prices, their % profit margins never change despite what minimum wage you force on them

the CEOs the self's say this exact thing publicly

the main issue is INFLATION (which is 100% related to Central Banks increasing the money supply by multiple % every year).

Edit: Corporate(human) greed is also a problem, but that's another topic

0 sats \ 0 replies \ @Solomonsatoshi 4 Jan

Companies may wish to maximise profits but increased costs does not automatically or logically enable them to do so. Increased costs simply reduces their margins. In a free market if they increase their prices regardless they will inevitably and quite logically lose market share to competitors. CEOs spout self serving duplicitous BS that is essentially an empty threat and a blatantly bullying political posture and you take it for gospel despite it being contrary to first principles of Econ 101 - explains a lot. This is Econ 101 basics - that seem to have woooooshed over you in the Austrian Alps..