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View Diary: Michele Bachmann wants to eliminate the minimum wage (139 comments)

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  •  This calls to mind the line (0+ / 0-)

    that Economics 101 is why they teach Economics 102.  Unless aggregate demand is increased somehow, either if prices fall sufficiently or government intervention, there would be no net benefit.  Lowering wages doesn't put any more money into the economy, so at best, prices stay stable.  At worst, they continue to fall because individuals on whose wages there is downward pressure would spend less, both out of necessity and in anticipation of falling prices.

    Ironically, Bachmann's making a distributive argument -- that it's better to have 5 people making $20 than 4 people making $25.  If that's so, what about the guy making $100?  

    "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

    by Loge on Tue Jun 28, 2011 at 11:47:51 AM PDT

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