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Fascinating. So, you think that:

* Changes in the COGS cannot change selling price. (This is truly a revolutionary concept.)

You clearly don't have the faintest clue about elasticity relationships. ANY burger shop is not a monopoly, and even if it were, there are thousands of available substitutes. You cannot simply pass through a COGS increase (I'm frankly shocked that you know ANY of the language of accounting because so little has apparently sunk in) in the form of higher prices.

Every Freshman economics student understands that if cost of labor rises, demand for labor falls. YOU haven't shown how you can alter those relationships.


You do call for "equity" which means raising everyone elses wages also, which would have only the effect of raising relative wage and price levels, resulting in the identical conditions that prevailed before the wage increase.

Despite all your gloom and doom analysis, here is what could happen:

Actually, we know their federal fringe is at least 7.5%, and if you factor in overtime and holiday pay, plus whatever discounted meals they get that's probably close to the right number.

Thanks for expanding my lexicon of politically correct euphamisms.

* The volume of burgers to be inverted rises, because there are suddenly millions (not just MIT's, but many other min wage workers) that can now afford burgers).

* Sales volumes and resultant profit margins rise on the strength of the additional cash flow through the economy. Remember, even in a slow economy, each additional dollar counts as five.

* Government welfare payments are reduced substantially, saving taxpayers money and further stimulating the economy.

* Government tax revenues rise on the strength of the more robust economy.

How about the more likely scenario: that your minimum wage increase will:

1) Result in the prices of basic commodities skyrocketing. Every farm worker, meat packer, ranch hand, grocery worker and everyone else involved in factor input production gets a DOUBLING of their hourly wage, while doing exactly the same job as before. Every single commodity just got more expensive by a factor of about 1/3.

2) Right away, you get substitution for these now more expensive goods. Imported agricultural products just got relatively cheaper, which means that domestic production falls. But because you're running the Socialist playbook, you decide to slap import quotas and tariffs on, which just increases domestic prices more, exacerbating the problem. With no economically efficient alternative, businesses MUST consume domestic goods, the supply of which is inelastic, resulting in a price increase.

The increased prices of factor inputs make American goods more costly relative to those in other countries, so Exports fall dramatically. This has an additional ripple effect throught the economy, resulting in even more layoffs. Except that the effects of this wholesale price increase are felt through the ENTIRE economy! The "middle class" and the "rich" begin to suffer! Nice work again.

3) Also . . .Fast food is an INFERIOR GOOD: As income rises, demand for burgers falls. So your Utopian scenario, where the entire world eats Burgers, has yet another flaw. For the portion of the population you've advantaged, many of them begin to eat at home, because the cost of groceries, while higher under your regime, is cheaper because there's no included labor cost.

Also, for the rest of the population you've thrown into unemployment, they aren't eating out, they're eating whatever their Food Stamps can buy them, in whatever Section 8 housing they can afford.

Now, I'm not pretending that all this surely will happen,

So you admit that it won't. Now we're getting somewhere.

but there have been many instances of government spending and government regulation that have had a WAY more positive effect on the economy than capitalists predicted.

You have an annoying habit of wrapping a Socialist platitude around an acknowledged fact and then generalizing that to a policy statement.

Child labor laws, and the original incarnation of the Fair Labor Standards Act went a long way toward FACILITATING Capitalism in this country, by curbing its abuses. But you want to take it beyond that, and use government regulation of the cost of labor as a means of improving the economy.

The problem with that is that you cannot create something out of nothing. I am all for an increase in everybody's wages, so long as their productivity increases. If they want to make ten bucks more an hour, let them produce fifteen bucks more in gross profit.

But you want to use the power of government to force wage levels higher while letting people do exactly the same jobs. And in the extreme short run, that's a net negative for our economy, and is a careless, thoughtless way to drive unemployment through the roof.

Maybe then you could save it with your big brain and your New Deal policies. Would that give you the precedent to establish a Workers Paradise?

So, have a little faith, look at the broader picture and imagine being an American.

I've been an American all my life and I don't appreciate your Xenophobic allusions. I contribute daily to making America a better place to live. But you want to destroy all that, just so you can get off on the power and control that comes from being a bureaucrat.

You will never stop THE INVISIBLE HAND!