Thursday, August 13, 2015

The Jones Curve in Economics

"Nobody ever went broke underestimating the intelligence of the American people." Said Mencken, Barnum, Jones? It doesn't matter, it is true.

How little do Americans understand about economics? There is an outcry now to double the minimum wage to $15  an hour. The same people want  the dollar menu at McDonald's to stay and Wal-Mart to keep selling for less and they think that "dollar" tea is guaranteed in the Constitution. Sorry folks, the real world doesn't work that way. Increase minimum wage to $15 and everyone else's pay will go up as well. If the guy cooking fries gets $15 an hour, what's the plumber charging?? Taxes will go up to cover the higher wages paid to government employees. Other than teachers, of course, who will all be practicing asking, "Do you want fries with that?"

Cost of manufactured goods will go up as well. The Dollar Tree will be the $1.50 Tree. The minimum wage won't affect the slave labor in China but there is all the labor in transporting, stocking and selling the cheap stuff that will cost much more.   In three years 15 bucks will buy what 8 bucks does now. Then they will want $30 to work the counter. You should have listened in school.!!


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