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Oh my. It sounds like some markets are driven by "animal spirits," if I read you correctly, PR
I agree with the basic premise that raising the cost of labor would, "all else being equal," lead to lower demand for labor. I'm merely bringing in the countervailing effect on overall demand for goods and services resulting on higher wages for the working poor. To this might be added a predictable salutary effect on poverty relief programs which are supported by tax dollars.
Put another way: the dollar in that working man's pocket goes right back out into the economy, like clockwork -- that's what poverty means, you need more than you have to spend.
Some people on the borderline of slipping into government-paid support programs of one kind or another, won't -- so that's impact number two, on the other side of the ledger.
Supply and demand on the global level has indeed leeched many of the lower-tech jobs out of America. But we're also notorious for productivity advances trumping labor cost disparity. In the big historical sweep, we don't have the option of pining for the good old days where you dropped out of school in eighth grade, worked at the mill faithfully (and much to your own physical detriment) for thirty or forty years, then retired on a nice pension. Employers have access to arbitrage tactics, excluding jobs that make infrastructure and education important (or local services markets.)
So it's not like I'm somehow dead against weighing supply/demand for the labor market; it's the other moving parts that concern me for the reductionist view.
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