I’m No Logician, but…

State Representative Susan Lynn says

If the bill passes, any increase in CPI translates into higher wages, which produces higher costs, which translates into higher prices, thus a higher CPI results, and thereby triggering another increase in minimum wage – this effect is circular and compounding.

But I don’t think I’m buying that. Any increase in CPI translates into a higher minimum wage, but that’s not the same as higher wages in general.  Also, most products aren’t produced by people making minimum wage and so it seems to me that raising the minimum wage doesn’t actually increase the price of goods, or at least that it’s not so obvious as Lynn makes it seem that it does.

4 thoughts on “I’m No Logician, but…

  1. Any increase in CEO pay just translates into higher costs, which translates into higher prices, which translates into greater pressure for tax cuts, which leads to decreased regulation, which leads to greater CEO pay – the effect is circular and compounding.

    This is fun. Let’s try defense spending.

    Any increase in defense spending translates into higher propensity to use force, which produces confrontation, which translates into blowing up lots of missiles and tanks, which translates into higher defense spending – the effect is circular and compounding!

    It’s amazing how easily negative or positive feedback in a system can become deterministic, especially if we can ignore all other variables. Let’s try hugs and kisses.

    Any increase in diplomacy and love translates into goodwill, which …

  2. Just realized I didn’t play the negative feedback game!

    Any increase is CEO pay attracts top talent, which creates competition, which leads to increased efficiency, which drives profitability, which more than pays for the CEO salary.

    Any increase is defense spending translates into potential damage to enemies, which acts as a deterrent to mischief, which causes bad guys to behave, more than saving the cost of the initial defense spending.

    Any increase in diplomacy and love translates into vulnerability, which leads to opportunism, which attracts confrontation, which exposes the vulnerability, leading to war and hatred rather than diplomacy and love.

    Raising the minimum wage results in transfer of income from those who invest to those who spend, increasing business revenue while increasing competition for investment capital, rewarding efficient businesses and punishing the inefficient, resulting in greater long term GDP growth and the growth of a stable middle class that is willing to support growth-oriented policies.

    Stay tuned for “raising or lowering taxes too much will result in no tax revenue at all!” And B. thought it wasn’t obvious…

  3. Thanks Jebbo! Your response is both smart and funny and gets at what was bugging me without all the wishy-washiness of my position.

    Her whole “Nobody makes minumum wage for very long” contrasted with “but raising the minumum wage will ruin the economy!” seemed to me to be contradictory. If no one is making minimum wage, how can raising the minimum wage hurt anyone?

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