[Superman]

John, I'm not amused or impressed by your insults. Before taking my current job in April 2003, I calculated minimum wages to be paid in Washington State. This included the minimum wage which is indexed to inflation (CPI-W index, FWIW), and prevailing wages. I have an MBA degree with emphasis in labor statistics, and supervised economists.

So, ummmm, I think it's fair to say I have a clue. Part of what I am trying to point out here (and I think I'm just about done because it looks like my effective audience has already got it) is that econometric models are not as simple as you think you were taught. For example (and at this point I really am not sure why I am bothering), in the model I have described, ALL minimum wage workers get the raise. So no, I am not assuming a monopoly, but you appear to perhaps be thinking that some restaurants can keep the status quo and pay $5 per hour and leave burger prices alone? Bottom line is that increased costs will drive burger prices up. Again, this is where your simple supply and demand curve, in a perfectly competitive market (which of course does not exist. I assume you got that one right on the quiz.) will not work. The part of the simple curve you recall that works here is that when price changes, a new equilibrium quantity will be reached. But the change will also increase demand, since more people will then be able to afford burgers. In fact, everything shifts. Since those workers will be buying other stuff also, other merchants and their employees will be earning more, and better able to afford burgers. As I've said, another shifting variable is going to be some general inflation. No doubt, what I've suggested would bring a significant economic shake-up, and that's a legitimate basis for criticism. And as I have also said above, other workers will also get raises, who are part of the burger mfg stream, which will also apply upward pressure on burger prices (or, if you have an easier time with this concept, it will squeeze the profit margins of the companies involved (which of course will affect price).

Now, even taking all this into account, we're drastically oversimplifying. Different industries have different sensitivities to changes like this. For example, this change might impact cost leaders (like McDonalds) more than differentiated competitors (like Dairy Queen) changing the mix of competitors and market share. But I'm not making this example to illustrate that.

I am making this example for the purpose of illustrating what has been proven before and is not theoretical. By having a minimum wage that earns just over $892 per month (assuming an ordinary, full time month) BEFORE taxes (by the way, payroll taxes are payroll taxes, not benefits. And also, in the "quick service" industry which is the industry's preferred name and not some liberal term, in the "quick service" industry vacations are nearly unheard of. IN fact, full time jobs are not the norm. Paid holidays....give me a break. And those free burgers that keep workers on the premises during breaks and at least ensure they are not working hungry....ummmmm....will not rise by 38%) we are deciding to create a substantial portion of the economy and a substantial proportion of our neighbors either 1) in poverty or 2) working two or more full time jobs in order to make ends meet, which of course creates problems if those workers are also trying to raise children with values learned at home. And I sure don't want to hear someone else's ignorant opinion here that minimum wage workers are single minors being supported by their parents.....this is not the profile of the average miniumum wage worker.

So, anyway, I am certain I am wasting my time, but I'd guess I've already gotten through to the folks who understand that economics is a social science. Economists understand this. And by the way, while I am told there are conservative economists out there, I have yet to meet one.

One more thing (at least). Workers in beef rendering factories who handle hundreds of tons of protein per day are not going to have that much impact on the price of burgers. In fact, in dealing with the "quick service" lobby in our local legislature and the other cheap-labor industry groups, there is an outcry each time wage regulations are under review. And you've apparently received the script from one or more of those associations. The outcry is to pretend that prices will skyrocket. Indeed, that never happens and in fact price increases, on those rare occasions that then even occur at all, are very very slight. In fact, (again, because of some economic forces too complex for Economcs 101) prices fall instead at times when we are warned they will skyrocket. So, try someone else.

And finally, as I have said, I am tired of any industry getting tax credits and tax reductions, and also getting subsidy in the form of being able to employ working single parents at wages WAY too low for subsistence, and having the taxpayer make up the difference. Someone has to, and this is a nice gravy train for minimum wage industries, but it's time for those industries (and those of us who buy burgers) to pay as we go instead of dumping the problem on taxpayers' laps.

Oh, and someone above seems to have a problem with wage regulations in general. I have dealt with folks like that before, though they are never actually in the game of public policy discussion and debate, like in a legislature or Congress. Nobody who thinks actually supports the notion of eliminating laws like this, or anti-trust laws. It's clever-sounding as long as you don't actually think about it. It doesn't pass the "straight face test."

I may not even check this thread again. Economics is a subject that economists agree is up for grabs, and this discussion, if it happened between actual economists, would get really complex really quickly and there'd still be MAJOR disagreement. It so happens that I am not an economist, though again I have worked with them and I find their work interesting. My focus is in labor policy and statistics. So, if you're an economist John, then my hat's off to you. tough stuff, economics. Mental calisthenics. But I would still say your model is too simplistic and does not account for industry-shaping impacts of public policy decisions (regulations if you will) like this one. And to close, here's a story:

One of my economics profs at Gonzaga University used to administer a 10-question T/F quiz each Friday and he'd read the correct answers each Monday. He was reading the questions and providing answers one Monday, and one of the questions started out "Economist agree that...." and he stopped and declared that question obviously false.