This situation highlights the need for higher wages. How absurdly low some wages are!!! And of course we can't use absurdly low wages as an argument for cutting the low, basic, unemployment compensation paid to a substantial number of people. That would of course be absurd! What we must advocate for instead is a reasonable wage for all workers.
Government forcing minimum wages does nothing. Companies raise the cost of goods and services passing the increase on to the customer/ workers and the worker ends up right back where they started. This argument has been debunked many times. Imagine paying Mcdonalds workers $15 an hour. Well now you have those people in the next economical tier in somewhat skilled labor who are making $20 an hour thinking, "Wow! Why am I busting my ass up here when I could easily go flip burgers for just $5 less?! There was no increase in value to accommodate the increase in wage so other companies are not going to be increasing to accommodate their workers because of this increase.
Increasing wages will do nothing. Blacks will still be having children out of wedlock which means a bunch of black males will still be committing acts of violence. A lot of these out of wedlock births are purposely done and not accidents so its not an issue of birth control. its an issue of irresponsible decision making. there are many impoverished groups in our country but none come close to the extreme violence and crime from the black community.
The common wisdom is that nearly 100% of wage increases will get passed directly to the customer. This has resulted in both defective arithmetic and defective thinking. For most products, a 20% increase in wages will come nowhere near to a 20% increase in production cost. And, of course, the cost passed on to the customer will be far less than a 20% increase in list price. The portion of wage increase that gets passed on to the customer tends toward a maximum determined by the ratio of labor cost to total product cost. The trend nowadays is toward lower proportion of labor cost. For some products, a big increase in wages would barely appear in the final cost of a product. In the past, when our national productivity was more closely tied to labor, it is true that a rise in wages could significantly affect prices. A wage-price spiral would be the feared result. Today, however, the link between wages and production cost is considerably weaker than it was in the past. When wages are below the true cost of labor, as is the case for heavily subsidized minimum wage labor in the U.S., the result is a distortion in the economy caused by cost shifting. This type of economic distortion is significant in the present U.S. economy. The difference between the true cost of an hour of labor and the price paid for that labor by the producer is made up by the government. Or, in the case of young labor still living at home, by individual families. The economic distortion caused by wages below their true cost is eliminated when wages rise to their true cost. Naturally the producer is inclined to use wage increases as an excuse for higher prices. In markets that are both globalized and subject to internal competition, however, competition holds prices in check.
Except we live in the age of automation. How many jobs would be cut because it's cheaper to use machines to flip burgers than to pay humans $15? How much more productivity would they gain from machines over minimum wage workers making $15? How much less complaining? Automation is a reality and expected to increase over time. Forcing companies to pay higher wages where value isn't increased to meet those wages just propels this scenario.
Its really not a wealth gap at all. Its actually a gap in morals, violent criminal behavior, and a gap in responsible decision making. If Biden wants any credibility at all he would address the real issues opposed to pandering to fake movements and causes.
You've made the argument before. Actually, I should state that you've attempted to make this argument before. When you did, it showed a lack of general business understanding. May I ask how it is you assume wages will rise and profits will remain the same? Or do you believe a "fair wage" can be absorbed fully by pricing in the market? I mean, how is it you anticipate a company can raise wages - in some cases to essentially double (like minimum wage, for example) without taking a hit to the bottom line? Sorry, I see that you answered that later on, here: What the...? If I understand you correctly, you are stating that a 20% increase in wages will be made up through some lower (than the 20%) amount in price (but some amount will have to be made up in price) and the rest will be covered through...what? Do you even say? Are you saying that the government will reduce the burden on private entities in return for a rise in wages? And that this will properly balance the increase cost private business sees in bumping wages? Am I following you here? If we accept wages rising to their "true cost" and pay them accordingly through private enterprise...what makes up the different to private enterprise? And you've spoken to production, but what about in the case of a service only establishment? Take a restaurant as an example. I suddenly allow wages to go from $7 an hour to $15 an hour. Where does the restaurant - that traditionally operates on razor-thin margins - recoup the expenses and remain solvent?
Besides that, what happens when wages rise? Oh shit, prices for goods and services go up, and rent too! That's why if he was honest he would advocate for price controls as well as min. wages.
Except that you can't go to price all the time. Some products and services are highly elastic and sensitive to price adjustments. Then, once you layer on competition, you have to hope everyone does the same deal and doesn't try to undercut you either through pricing or slower/lower cost reduction (in this case, not providing a wage rise). Piezoe is a big supporter of the Fed. He wants inflation. Higher pricing isn't his concern. And for the sake of this argument, if you could pass on the cost to the consumer the argument would simply be one for or against inflation. But you can't pass on 100% to the consumer. That is the problem.