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0 sats \ 2 replies \ @Solomonsatoshi 4 Jan \ parent \ on: Help me understand minimum wage logic better econ

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..