On Apr 24, 1:07*pm, "Ed Huntress" wrote:




I don't believe that they even have the effect of "cutting the bottom
out of the labor market" as you say, because so few actually work for

Pete, if the people making minimum wage are "very few," how could an
increase in the minimum wage trigger inflation?

Easy. The wages of people like backhoe operators is determined by the
wage of a laborer. A backhoe with a frontloader can do as much work
per hour as about seven or eight laborers. And therefore a backhoe
costs about 7 or 8 times as much per hour as a laborer costs.





We could look at the numbers and show that there is a correlation between
minimum wage and inflation, but you'd see that, at least since 1968, wage
increases have LAGGED inflation by a substantial amount. And, again, the
monetary effects of increasing minimum wage are so low that they disappear
into the noise.

There is not a lot of correlation because a lot of that time, one
could not hire anyone at the minimum wage. It was certainly true in
the Seattle area when I was there. I do not know what the minumum
wage was at the time, but you couldn't hire a high school kid for less
than $10/ hr. And an adult cost a few dollars more.

So what the minimum wage really did was to jack up the labor costs of
the states which had low wages. But did not affect the wages of the
states with high labor costs.

Question for you, Ed. How much per hour does one have to pay for yard
work in your area? Mowing grass, raking leaves, trimming hedges? And
what is the minumum wage?


Dan