Thread by @studentactivism

Lots of minimum-wage-hike critics wandering around imagining that corporations set their prices pegged to a specific set rate of profit rather than charging whatever the market will bear at a given moment.

"If you raise the the wages of fast food workers, McDonald's will charge more for Big Macs!"
"Why?"
"So they make more money!"

If they'd make more money by charging more for Big Macs, they'd be doing it already.

What McDonald's will do if the price of labor goes up is MAKE SLIGHTLY LESS PROFIT. That's what'll change. That's your argument. Have fun with it!

(And yes, there's the argument that raising the minimum wage is inflationary. That's a different argument. Want to make it? Go find an economist to fight with.)

Similarly, there are people in my mentions arguing that raising the minimum wage is a drag on employment. Again, that's not the argument I'm responding to, and again, if you want to make it, take it up with an economist. (Because most economists disagree with you.)

I should note, by the way, that I'm oversimplifying my primary argument just a titch. If labor costs go up, the price point at which profit is maximized may shift slightly. Sometimes it does, sometimes it doesn't, sometimes it shifts and then reverts.

And often minimum wage hikes wind up making it easier for low-wage employers to turn a profit, making it easier for them to attract and keep good workers, driving up demand for their products, and so on.

Economics is complicated, and lots of very smart people spend a lot of time trying and failing to predict the future of markets. But one thing we know for sure is that "if wages go up, employers inevitably hike prices to recoup lost profits" is wrong. Wrongitty wrong wrong wrong.