The Punning Pundit

Having more discretionary income is always a good thing. I'm pretty happy with my TV though...

The immediate argument against this line of thinking is, of course, "but what about small businesses?" A smaller company may not be able to afford to raise everyone's wage, and therefore may retreat into using methods like forcing their employees to go to part-time, cutting back of benefits (or raising the cost for benefits to the worker), etc.

Not only that, but I often wonder if there isn't a correlation between rising wages and rising costs for things like housing. Where I live/work, minimum wage is significantly higher than the state/national level. The price of housing is also significantly higher. I have to wonder if raising the minimum wage would help, or if it would just be an excuse to raise costs?

In a competitive market (and housing is a very competitive market!) prices only go up when they absolutely have to. Your landlord wouldn’t raise your rent just because you got a raise-- you’d quickly move elsewhere...

Likewise: I’m trying to think of a small business that pays minimum. Most minimum (or minimum-effected jobs are in the retail sector. By and large that industry has consolidated to a very few large operators. Other small businesses include things like restaurants (which pay in tips), technology (pays in stock—and way more than minimum salaries!), personal services (generally skilled labor, pays way more than minimum) and so forth...

While a landlord won't raise your rent because you got a raise, I think they would be more likely to raise rents if minimum wage went up. That's not a personal/individual difference, it changes the whole market.

Also, just because you can't think of minimum wage jobs doesn't mean they aren't out there. For example, I used to work for minimum wage as a radio engineer for a small station. I've had friends who worked at larger stations for little better. Technical job, crappy pay. It happens.

You're also more likely to encounter more minimum wage paying jobs outside of large cities, where larger companies won't have as much of a presence.

“While a landlord won't raise your rent because you got a raise, I think they would be more likely to raise rents if minimum wage went up. That's not a personal/individual difference, it changes the whole market.”

True-ish. What happens is that the market rate will stay stable for a while. During this time profits will fall (expenses will be going up) but income will still exceed outgo. Then someone will raise their rates and this will change the market enough for everyone else do to it. This process will take a few years, though...

If minimum wage were set to (say) 7.5/hr with a biannual cost of living adjustment (just like congress gets) we’d do a great deal to eradicate poverty. But the idea of a COLA for the poor seems to be anathema to certain people. Dunno why...

In my experience, the market rate will stay stable until leases start to expire. Then up the costs go!

I think when it comes to not giving a COLA to the poor, there are a couple possibilites:

1) The people with the power to do it "don't care" about the poor (they aren't contributing, so they don't matter)
2) The notion that those people got there because of something they did, and could get out of poverty if they just tried harder.

Thinking that the poor are lazy or choose to be there is a very convenient excuse for not helping them.

Rents rise every year, with inflation. I find it hard to believe that property owners could raise rents more than they already do without finding themselves with more vacancies. A demand economy is possible with housing, Davis is a great example. Students became tired of high rents in town, and moved to the surrounding areas, causing the town to go from having virtually no available housing (One year leases were signed 6 months in advance) to a 2% vacancy, with owners begging for renters with special deals and discounted rents… Although the college-town aspect must be considered as a factor, and Davis is probably an exception, not the rule, it still demonstrates the affect people can have.
Overall, I agree with the essay’s argument,but somethins seems a little off: We get more money, so that we can spend more money, so that we have a better economy, and thus earn even more, and can then buy more goods?
I must add: the worst editing errors are the ones that the folks over at MIT haven't yet figured out how to deal with. If you read over your work and didn't rely on spell check, you would catch them.

Afaeyre:
As for your point
“You're also more likely to encounter more minimum wage paying jobs outside of large cities, where larger companies won't have as much of a presence.”
I can only point you back to Ezra’s research on the topic. Higher minimum wages tend to correlate with lower unemployment.

Jdisciacca:
“We get more money, so that we can spend more money, so that we have a better economy, and thus earn even more, and can then buy more goods?”

Yeah, pretty much. I happen to like the stuff money buys. It’s not the only important thing in my life, but it sure as hell makes everything else easier...

Well, you leave me in something of a quandary: ought I fix things (I do see some of the errors you are referring to), or ought I leave things alone?

If I change my text, then I might make some of the responses (yours, for instance) irrelevant and silly. If I leave it alone, I make my argument less-relevant and sillier-than-it-might-be. I think I’ll leave this one alone and resolve to—in the future-- proof read my more serious pieces...

Basically, the supply side holds that people would by stuff if prices were lower, and prices would drop if there were more stuff on the market. Therefore supply-side policies tend to favor putting money into the hands of people who will create more

I think you're confusing financial supply with supply of goods and services. It isn't so much "putting stuff on the market" or lowering prices as it is expanding the economy through greater investment. The main argument of supply-siders was more that

1) If people with money invest, people will be able to start new businesses and expand existing businesses, creating jobs and expanding the economy

2) Therefore, government policies (such as high taxes on capital gains) that reduce people's incentive to invest hurt the economy

It's important to realize this does not necessarily conflict with theories based on increasing demand; they are complementary theories more than competitors. For instance, lower interest rates both make more money available to entrepeneurs and make it easier for consumers to spend.

Rents would go up, because demand would go up. People have more money, which means that while you don't want to pay more, someone else will be willing to pay the landlord more to take your spot.

Also, I don't see corporate buybacks as making the corporation less accountable. It is simply more accountable to the remaining stockholders. Also, given the onerous burden that Sarbanes-Oxley has made for corporate compliance, anything a corporation can do to lessen exposure to compliance costs and to class action suits is probably a damned good investment.

Finally, very, very few workers make the legal minimum wage, and they are generally teenagers. They just don't have that much of an influence on the economy. Do you really want an economy driven by the tastes and desires of teenagers working at Burger King?

I imagine you saw my comment on Dean's World, so here I'll just address your use of Ezra Klein assertion by directing you to Jane Galt: Klein is wrong - there's no correlation and what little there is appears to be negative unless you very carefully throw out outliers.

Thinking that the poor are lazy or choose to be there is a very convenient excuse for not helping them.

Well, that was certainly why I was so poor in my younger days. When I figured out that I needed a saleable job skill, and that showing up for work took precedence over getting high, I no longer had to worry about where my next grocery buy was coming from.

It took the Gingrich-era "tax cut for the rich" to actually move me into the comfortable middle class, but that's another story.