Minimum Wage and Aggregate Demand
are devalued. No one’s wages are keeping track with the rate of inflation, and while raising minimum wage might help to increase aggregate demand, it would undoubtedly also lead to more unemployment as businesses struggle to maintain margins while passing on the cost of hire wages to consumers. Lowering the minimum wage or abolishing it altogether would actually do more to help reduce unemployment, as it would take off the burden of meeting a minimum wage that businesses currently experience—but then it might not do a thing to lift aggregate demand and help grow the economy—at least so goes the argument. The problem with that… Continue Reading...
