Report Card for Donald Trump

[TnT]

(12-23-2016, 08:42 PM)Eric the Green Wrote: Studies that I have heard of say that higher minimum wages increase jobs, because when people are paid better, they buy more and thus create jobs for the businesses.

The problem arises in the difference between macro-economics and micro.  Sure, at the macro level, macro demand "trickles down" to individual businesses, creating more demand, maybe, if the particular business has something to sell that is aligned with the larger economy.

The trouble is, in an individual business, paying out more money for the same amount of revenue in the short term simply brings pressure on the business.  If the business is doing very well, it may have enough slack to watch its higher-paid wages to come circling back in the form of higher demand, someday.  If it's a struggling business, not.

Forcing business, expecially small to medium sized business to pay out more is likely not the best answer.  The better answer is to drive demand into the system using the government as employer of last resort, and as a stimulus supplier.  This works better ... drive up demand for all goods and services, which in turn drives up revenues for business which drives up demand for labor which finally and most best ... drives up wages.

Simply, and only, increasing wages is the same thing from the labor side as supply side is to the business side.  Demand is what finally drives the system.  And stimulating demand is the best solution.