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On Apr 26, 5:10 pm, "Ed Huntress" wrote:

That may be true (I didn't check), but the numbers don't work in terms of
influencing inflation, Dan. Total construction costs run around 8% of our
economy. Total excavation costs run from 7% (new residential) to 40%
(shopping centers) of that. A typical minimum wage increase is on the
order
of 8% - 10%.

So, if you included all excavation in your theory about backhoe operators,
you have something like 1.5% of the US economy. An increase of 10% of the
minimum wage would add maybe 0.15% to inflation, by that means, at the
most -- assuming your theory is correct, of which I'm skeptical.

You don't have enough there to have any measureable influence on the
economy. It's lost in the low-level noise. Next theory? g



Geez, I am not trying to say that excavation has anything to do with
the discussion.

Oh. The backhoes threw me. d8-)

Just pointing out that raising the minimum wage
affects how valuable labor saving devices are. Those that benefit
most from raising the minimum wage are those that make higher wages
building equipment that can eliminate minimum wage jobs. Backhoes are
just an example.

Interesting thoughts, but I'm sure you realize that the economic effects of
minimum wages have been debated and researched for years. There must be a
library full of expert arguments on the subject.

I can't draw any conclusions except that it's still a "on the one hand, but
on the other hand" kind of argument. It appears that a lot of people making
minimum wage are not entry-level workers, but rather poorly qualified
workers who are stuck there -- especially since unions and seniority
agreements have gotten weaker.

It's a tough one.



There is not a lot of correlation because a lot of that time, one
could not hire anyone at the minimum wage.

If you can't hire someone at minimum wage, then the minimum wage has NO
possible effect on inflation.

Next theory? g


That is what I am saying. You will not find any correlation between
minimum wage and inflation during any time that the minimum wage is
below the level of pay for unskilled labor.

Right.

So all your statements
about minimum wages correlating with inflation or not correlating with
inflation depend on what the current market wages are.

Well, that's probably true. All I was saying is that minimum wage increases
do not lead inflation rates. It's usually the other way around, although
inflation keeps marching despite minimum wage levels. It's just that there
doesn't appear to be a causative relationship.

If the minimum
wage were to be raised say to $1000 per hour, it certainly would
affect the inflation rate. If the minimum wage is below the market
level for unskilled labor, it will have no affect.

All right. But economic effects of small policy changes, like raising the
minimum wage by 8% or 10%, generally are weak, either way.

You can find anecdotal examples to support one side or the other. But
correlating it with inflation or employment generally doesn't work. The
numbers just don't provide clear support.

--
Ed Huntress