Get Even More Visitors To Your Blog, Upgrade To A Business Listing >>

How Increasing The Minimum Wage Will Boost The Economy - Many People Think "Demand & Supply" Is Of Only One Type But There Are Actually Many Types Of Demand & Supply.

Types of Demand Illustrated
(screenshots from here)

First there is Elastic Demand, i.e. where demand decreases with an increase in price and increases with a decrease in price. This is the only demand curve right wing "economists" seem to be aware of. This type of demand can be analyzed thusly;

This sort of demand usually exists for brand knocks offs that sell at cheaper prices such as equate or great value products. If Wallmart increases price they competitor brand which they are copying will begin to look better. So wall mart has an electric demand (like the image below) where they can increase price by a little but if they did by alot their demand would fall to 0 as consumers switch back to the original brand name products. However, at their cheap price Wall mart can sell a ton of stuff as demand is very high.

On the opposite side there is INELASTIC demand, i.e. when they demand stays pretty much the same no matter how much you increase the price (though rationing may occur). These types of products would be cigarettes, water, electricity and other such essentials (or habit based products).

So, for certain products the demand will basically remained unchanged.

The commonly known demand curve is this one;

Supply curves exist the same way, a quick summary;

Types of Supply Illustrated
(screenshots from Investopedia)

An increase in price will cause a supplier to supply more of a product, at least over time if production capacity is maxed out (i.e. they would be time involved in getting more machinery or opening more offices to increase supply);

Then there is a supply type that does NOT respond to an increase in price. Labor falls into this category. A large increase or decrease in price would not change labor supply 

In addition to this the demand for jobs will ALSO be relatively inelastic as people need to support their families (very few people can actually leave the workforce JUST because the wages or low. Also an increase in wages by a small amount in another region doesn't make labor pick up and move i.e. they tend to stay in their geographic region further illustrating how inelastic supply of labor reall is).

OK. So now we know that, proving we don't make it easy to send jobs abroad, there is an inelastic supply of labor with a relatively inelastic demand for jobs (as they need to survive). So although blue collar workers aren't technically slaves (lack of choice in jobs with lack of availability o leave is what the low wages of nothing profitable for companies of that time) they have very limited choice in what they can do about work no matter what the minimum going rate for labor is.

Now we look at the other piece of evidence, i.e. something called the multiplier effect;

Good Examples From Wikipedia:

For example: a company spends $1 million to build a factory. The money does not disappear, but rather becomes wages to builders, revenue to suppliers etc. The builders will have higher disposable income as a result, so consumption, hence aggregate demand (there will be MORE demand to BUY stuff thus increasing sales, taxes from sales, and the ability to open more businesses) will rise as well. Suppose further all of the recipients of new factory spending in turn spend it.

The increase in the gross domestic product is the sum of the increases in net income of everyone affected. If the builder receives $1 million and pays out $800,000 to sub contractors, he has a net income of $200,000 and a corresponding increase in disposable income (the amount remaining after taxes).

Investopedia: For example, if Mr. Gates deposits $100 into a bank, the bank must by law hold part of that in reserve, but can lend the rest of it back out. If it it must hold 20% in reserve, it can lend out 80%, or $80.
That $80 may be spent several times, but eventually, someone puts it in another bank. This bank keeps 20%, or $16, and lends out $64. This cycle repeats several times. After all the depositing and lending, Mr. Gates’ $100 could become several hundred dollars in deposits.

Read more: Multiplier Effect - Video | Investopedia
Follow us: Investopedia on Facebook

Definition: Every time there is an injection of new demand into the circular flow there is likely to be a multiplier effect. This is because an injection of extra income leads to more spending, which creates more income, and so on. The multiplier effect refers to the increase in final income arising from any new injection of spending.

Increasing Minimum Wage PARTICULARLY help women voters;

We know from EVIDENCE (a very important thing in any science especially a social science like Economics) AND THEORY that an increase in Minimum wage boosts an economy because of the multiplier effect, thus creating more sales of consumer goods and making more businesses and thus jobs possible.

A collection of pieces of evidence showing increasing minimum wage helps the economy;

Job growth seen in states that raised minimum wage - Sen. Bernie Sanders, I-Vt., joins to discuss a new study indicating that the 13 states who raised minimum wage saw better job growth than the states who didn’t. 

The problem we have appears to be one of Class Warfare. Mostly, its the GOP/Fox that are committed to this type of warfare to a ridiculous extreme;

The minimum wage challenge - Americans have been waiting five years for a pay raise, but obstructionist Republicans don't care. Ed Schultz, Rep. Tim Ryan and CWA President Larry Cohen discuss the need to raise the minimum wage. 

Related posts:

Economic Treason Proofs

  • Economist Robert Reich Calls The GOP's Economic & Political Tactics TREASON
  • Case for Indicting The GOP for Treason for The "Paul Ryan Plan" (*As Per The US Constitution)
  • The GOP-Republicans Have Rigged The Districts In Their Favor AKA Electoral Fraud AKA Gerrymandering
  • John Stossel & The Fake Budget (Debt) Outcry
  • Jon Stewart Alters A Koch Brothers' Advertisement To More Accurately Reflect Their Questionable Practices
  • America for Sale: The Oil & Gas Industry Just Bought Themselves A Pipeline Using Legalized Bribery, Thank You Supreme Court
  • Once Again Congress Is Successful In Protecting It's Shady Insider Trading Deals
  • GOP's Economic Theories - Disproven Under George Bush - Continue To Be The Basis For Their Policies PROVING GOP Are An Ideological Party & Not A Reasonable One
  • {Debt Ceiling History Example} The GOP's/FoxNews's Primary Goal Is To Do Anything To Win Elections INCLUDING Destroying The Economy If Necessary!
  • The GOP have been destroying the economy & opposing their own bills JUST to oppose Obama!
  • Case Study: John McCain's Random Demonizations & Flip Flops
  • The Anti-Science Party (GOP) 3 - GOP Lacks The Intelligence To Understand Scientists... Thus Their Mantra Is "I Am Not A Scientist" {Reflects a pattern]
  • GOP's War On Education 1 : An Off-Shoot Of It's War On Truth? (Examples Of Texas & Arizona)
  • GOP's War On Education 2 : An Off-Shoot Of It's War On Truth? (Example Of Oklahoma)
  • The GOP Is Pushing The Same Failed Economic Policies That Destroyed The Economy Under Jeb Bush's Brother
  • The Economic Recovery Under Barack Obama Using Basic Arithmetic That Bill Clinton Used As Well
  • Power Scale - Economic Distribution 1: Monsato Is Innocent, Problem Is Media Fear-Mongering Tendency
  • Cartoon Explaining The Socio-Economic Structure of A Functioning Democracy
  • Lessons From History: Tips & Tools To Help You Understand HOW A Tyranny (Despotism) Can Take Root OR How To Avoid Oligarchies, Plutarchies & Dictatorships
  • American Dream Explained In 1950's Cartoons

This is a copy and paste of an old post on this topic which seems to round off my argument pretty well;

The Arguments Against The Minimum Wage Debunked Using The Daily Show

In depth "study";

Basic Economics & Civics Highlighted

  • American Dream Explained In 1950's Cartoons
  • Cartoon Explaining The Socio-Economic Structure of A Functioning Democracy
  • Ducktators: An Ancient Cartoon With Modern Lessons
  • Cartoon of Basic Business Structure & Corruption Motivations With The Example Of Rupert Murdoch
  • How To Avoid Oligarchies, Plutarchies & Dictatorships
  • John Stossel & The Fake Budget (Debt) Outcry
  • Daily Show: 'Meet the people who stole your money in the financial crisis of 2008'
  • The 3 Branches of Government
  • {Insight into how the GOP's "communist" tactic works} GOP/Tea-Party Nonsense In A Nutshell: Outsiders are "Nazis"

Fox Business ... Exposed?

  • Ex-Judge Andrew Napolitano Says George Bush Was A BAD President For Civil Liberties
  • John Stossel & The Fake Budget (Debt) Outcry
  • Exclusive: The Daily Show Smashes Ex-Judge Andrew Napolitano's Credibility On History
  • I Smash Ex-Judge Andrew Napolitano's Daily Show Interview from October 2011
  • I Smash Ex-Judge Andrew Napolitano's Daily Show Interview from March 2014
  • Judge Napolitano Also Makes An Appearance In THIS Post
  • Case Study: Many "Business" Channels (Such As Fox Business) Are Designed To Deceive It's Viewers For Profit (Part 1)
  • Case Study: Many "Business" Channels (Such As Fox Business) Are Designed To Deceive It's Viewers For Profit - Part 2!

Related theme:

I SMASH Corporate Media!!!

  • I Smash The Media: A Look At How Easy Is It To Buy The Media & "Scientific" Studies
  • Larry Wilmore Skewers The GOP & Fox News Over Their Use Of The Label "Radical Islam" Using Obama's Words
  • I Quickly Slam Hannity On His Hypocrisy & Promotion Of Terrorism Through Petulant Labeling Designed To Create Conflict Not Resolve Them (i.e. "Radical Islam" As Opposed To "Terrorist" OR "Madman" Or "Mass Shooter")
  • I Smash The Liberal Media On Their False Narrative Of Trump's Judge Controversy (Chris Hayes, Maddow & Clinton)
  • I Prove, With An Ethnic Spanish Professor, That The Media IS Misconstruing Trump's Words On Mexicans Showing Thier Unconscious Racism.... Using Lawrence O Donnell, Rachel Maddow, Nightly Show & Articles
  • Daily Show: A Compilation Of Jon Stewart On Fox News
  • Daily Show: Jon Stewart On MSNBC (A Compilation)
  • Daily Show: A Compilation Of Jon Stewart on CNN
  • Rachel Maddow Defends The Friend Of A Mass Murderer Accepted As A War Criminal In Other Parts Of The World That Are Not The United States Because She's A Woman
  • Chris Hayes & The Rest Of The Liberal Media Push A Con Artists Party's View About Trump i.e. That Marco Rubio & The GOP Aren't The Con Artists It's Trump! (Memory Loss?)
  • I Prove That Lawrence O Donnell Is Too Biased & Weird To Be Trusted With News Of Any Sort (Elizabeth Warren Helps Prove This One)
  • (Dem Primary) Super Delegates Have Done Exactly What Samantha Bee Said They Would Do, i.e. Put A 'Brake On A Non-Establishment Candidate'... Why Is That OK? OR Samantha Bee & Rachel Maddow Prove They Don't Understand Super Delegates... Are They Too In Love With Hillary To See The Truth?
  • The Ultimate Collection Of 50 Fox News Lies Exposed By The Daily Show & Backed By Politifact
  • I Smash Lawrence O'Donnell On His Utter Hypocrisy Or Stupidity. Only A Lie Detector Could Determine Which.
  • Steve Kornacki Points Out That Hillary Clinton's Supporters Are Being Hypocritical About Bernie Sanders & His Supporters. If They Were To Look At Their Own Candidates History They Would Find She Did The Same
  • Clear Proof That MSNBC Didn't Cover The Iraq War As A Media Should (Same Goes for CNN & Fox News)
  • Beltway Media Covers Up Reporting On A Bi-Partisan Senate Report Proving We Were Misled Into The Iraq War By The Bush Administration & Jon Stewart Makes Fun Of The Media's Coverup
  • Rachel Maddow On The Iraq War Lies Ignored In Republican Campaign Coverage By The Beltway Media
  • The "Beltway Media" Is Covering Up The The Truth About The Iraq War Again & This Time There Is No Escaping That Fact
  • Jon Stewart Slams The Media for Continuing To Not Report Properly on The Iraq War... AGAIN!
  • Jon Stewart Smashes CNN, MSNBC, & Fox News For Their Hypocrisy In Misleading The Public Over The Iraq War & Not Admitting It
  • As The Media Laments The Upcoming Loss Of Jon Stewart From The Daily Show, They Avoid Mentioning The Episode Of The Day Before
  • Phil Donahue on His 2003 Firing from MSNBC, When Liberal Network Couldn’t Tolerate Antiwar Voices

This post first appeared on Culture & Society, please read the originial post: here

Share the post

How Increasing The Minimum Wage Will Boost The Economy - Many People Think "Demand & Supply" Is Of Only One Type But There Are Actually Many Types Of Demand & Supply.


Subscribe to Culture & Society

Get updates delivered right to your inbox!

Thank you for your subscription