Leon lcb11211@swbelldotnet writes:
On 3/9/2021 11:16 AM, Scott Lurndal wrote:
knuttle writes:
On 3/9/2021 9:16 AM, Leon wrote:
On 3/8/2021 3:46 PM, wrote:

I don't know how many of you worked through 60 and 70's but during that=20
time the minimum wage increased 60%. I was working as a gofur in a=20
grocery store while going to college, and looked forward to each=20
increase, as when the minimum increased Everyone in the store received a =

corresponding raise.

HOWEVER as a result of 60% increase in the minimum wage, we were=20
experienced double digit inflation rates in the 70's as the effect of=20
the minimum wage worked its way through the entire economy.


Come now. The double digit inflation rates were a direct result of
the embargo.

When was that? I recall price freezes on everything on the early 70's.
Before 1974. And I do recall gasoline still being 19cents a gallon in
1972.

I will grant you that. I wasn't part of the labor force until 1974, so the
embargo stands out in my mind.

However, from this bit of research (again by the Federal Reserve)

https://research.stlouisfed.org/publ...ssons-learned/

"Certain economists attribute the Great Inflation primarily to monetary
policy mistakes rather than other purported causes, such as high oil
prices and defense spending during the Vietnam War. In the 1960s,
Fed officials - and prominent economists - generally believed expansionary
monetary policy could propel the economy toward full employment. In other
words, they believed that elevated levels of inflation brought about by
expansionary monetary policy would be tolerable as long as the policy
spurred economic growth and brought unemployment down to its natural rate.

Underlying this policy was the Phillips curve, which suggests that a
trade-off exists between inflation and unemployment. Because some
policymakers believed unemployment was above its natural rate at
that time, they were more inclined to allow inflation to rise and
move the economy toward its potential output. However, the natural
rate was often underestimated: Economist Athanasios Orphanides (2002)
found that the Fed may have overcommitted to its expansionary monetary
policy stance because it was constantly aiming for - but never abl
to achieve -an "optimal" 4 percent unemployment rate.

the rest of the interesting article describes Paul Volkers drastic
measures to curb inflation, which severly weakened the US economy and
resulted in two recessions in the early 1980's.

So, nobody seems to support Keiths assertion that a rise in minimum
wage led to the "great inflation".