We created the minimum wage in 1938. We have raised it from time to time since then. Notable examples would be 1957, 1963, and 1996. Take a look at the inflation numbers for the years immediately following.
http://www.eh.net/hmit/inflation/inflationr.php
Just for good measure lets look at the inflation rate from 1957 through the end of the Johnson administration in 1969.
1957 3.38
1958 2.98
1959 .58
1960 1.72
1961 1.13
1962 1.12
1963 1.10
1964 1.37
1965 1.62
1966 2.92
1967 2.84
1968 4.26
1969 5.29
How about the 1996 increase?
1996 2.96
1997 2.35
1998 1.51
1999 2.21
2000 3.38
2001 2.86
Oh damn. The rate of inflation went down right after these increases in the minimum wage
In 1963, the minimum wage was the highest its ever been in real terms. Did this lead to inflation? Nope. Did this lead to job loss? Sure didn't. Unemployment declined more or less steadily until Lyndon Johnson left office in 1969 -- with an unemployment rate of 3.5 percent.
The 1996 minimum wage increase was followed by declining rates of inflation the first two years, four straight years of 4% GDP growth, and a low unemployment rate of 3.9%.
In 1963 we raised the minimum wage to the equivalent in current dollars of 8.00 an hour. Did it lead to inflation? Nope, sure didn't. In fact, 1963 was the front end of a major economic boom, which resulted by 1969 in 3.5 percent unemployment. "But that was the 1960's. Things are different now." Really. Well how about 1996, when we raised the minimum wage to its current level. This was followed by four straight years of 4 % growth in GDP and a low unemployment rate of 3.9 percent by the spring of 2000. This also pretty much lets the air out of the old "they'll just ship jobs overseas" argument -- something they wouldn't be able to do if we had sane trade policies and didn't promote right-wing sweat-shop economies in the third world.
It may be that I have "no understanding of economics at all", but I know when historical facts refute a dittohead's even punier understanding of the subject. Never let a cheap-labor dittohead like this joker get away with his posture of intellectual superiority. Not only is he not smarter than you, he's actually a moron. The proof is that he will absolutely not let these historical facts get in the way of his ideology. You see he has a "theory" that goes something like this: Employers will follow an increase in wages paid with a dollar for dollar increase in prices -- which leads to an upward wage/price spiral. Make sense?
Right here is a good place to say something I plan to start harping on. Facts ought to be enough, but they aren't. This guy will persist is this nonsense, trying to "explain away" these inconvenient facts. ....
It turns out the theoretical reason the dittohead is wrong is not that hard to understand. You see, he forgot about something. Consider the "burger flipper" -- a job that can't be exported to the third world. This is the cheap-labor conservative paradigm for the "undeserving" wage earner. In fact, you can hear the sneer in the dittohead's post. You see, flipping burgers is strictly "low skill" work. So the cheap labor conservatives reason that such labor is undeserving of decent compensation. Sounds good, until you ask yourself, "well, who makes the hamburgers McDonald's sells?" Why, that burger flipper. Here is the subtext of the conservative argument. Write this down, because it cuts right to the heart of it. You see, McDonald's investers "deserve" to profit off of the labor of the burger flipper. But the burger flipper doesn't "deserve" to profit off of his own labor. At bottom, that's what they're saying. They deserve to profit from your efforts more than you do.
As for the fact this dittohead overlooked, here it is. McDonald's has competition, namely places like Burger King and Wendy's. Now let's ask this cheap-labor professor of economics a question. What is the value of competition in the free market? He won't take two seconds to tell you. Competition holds prices down. That's why McDonald's won't just automatically raise prices. Because if Burger King doesn't follow suit, then Burger King will steal market share from McDonald's and make up for the wage increase in volume. Since it is unlikely that Burger King employees are working at full capacity, an increase in sales volume will also lower the unit cost, raised by the increase in wages. As for McDonald's, their increase in prices will lead to declining sales volume, and make the increase in unit cost even worse.
Thus, you can see how the best strategy for a business with competition, like fast food chains, might be to "stand pat", since the one who raises his prices might actually lose out.
But wait, it gets better. Since competition holds down prices, that increase in wages boosts real disposible income -- from the bottom right on up the economic ladder. It does so across the board, nationwide. You see, the economy isn't a "zero sum game" -- as conservatives point out from time to time. "The rising tide lifts all boats." This leads to an overall iincrease in sales volume for McDonalds, Burger King, Wendy's, and every other fast food joint -- as it does for the the tens of thousands of other similar businesses nationwide. This increase in volume, once again lowers unit cost restoring the orginal profit margins, while the increase in volume yields higher overall earnings. In other words, everybody wins.
From which follows increased investment, more hiring, lower unemployment, and still higher wages as full employment dries up the labor pool. This is yet another illustration of why "low wage" economies are in fact stagnant third world shitholes, and why cheap-labor conservatives can't point to one single example of a "cheap labor paradise".
You see, the booms following the 1963 and 1996 increases in minimum wage -- among other similar examples -- weren't "unusual" at all. It is entirely consistent with sound economic theory. Cheap-labor conservatives who claim that wage increases are inflationary, don't know what they're talking about. Now you know how to prove it.
First of all, when some "dittohead" sneers at a "burger flipper" ask him this. "If McDonald's shareholders can profit from the labor of a burger flipper, why shouldn't he profit from his own labor?"
That's why we had a minimum wage equivalent of 8.00 an hour in 1963, with 25% of the work force unionized [compared to 11% today], and one of the greatest periods of economic prosperity in American history. McDonald's was in business in those days. In fact, they were quite profitable." You might also throw in my personal favorite "show me one minimalist government, cheap-labor paradise".
Don't forget those historical facts and real-world examples. They are what give weight to your position, as you ridicule the dime-store economics of the cheap-labor conservatives. The best they'll be able to do is call you a "communist" -- which leads to another good riposte from a progressive at harmony-central. "So we were living under communism in the 1960's were we?"
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