Doubling Minimum Wage Has Little Impact on Consumer Prices
By lucas@endneoliberalism On 30 Jul, 2013 At 12:38 PM | Categorized As Labour, Neoliberal Alert | With 0 Comments

Liberal proposals for increasing both the minimum wage and taxes on multinational corporations usually brings the best out of right-wing extremists: “HOW WILL THE POOR AFFORD HIGHER FOOD PRICES?!”, they exclaim. A study by the University of Kansas shows that paying workers an honest living wage of $15/hour, double the legal minimum wage, would only increase prices of fast-food products like the Big Mac by only 68 cents. That’s plenty of money on the hands of consumers and an insignificant increase on prices.

The real impact of higher wages is on the long-term existence of organizations that push down the costs by undermining quality. When you have people earning $15/hour, the demand for healthy organic food and premium local shops increases.

As End Neoliberalism explains in Tax & Regulate The One Percent, progressive wage legislation and taxes on externalities pushes the economy towards greater efficiency. At the same time, the new economic equilibrium allows multinational corporations to evolve and continue to profit by providing better value to consumers that can now afford better products. Everyone wins.

Picture credit: petesimon cc by 2.0

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