Econ undergrads might say that raising taxes hurts growth, as might highschool students. Policy experts and professional economists are very much divided on the issue. There is plenty of evidence where raising taxes appears to produce economic growth, where it doesn't make any difference, and where it appears to hinder growth.
Raising the minimum wage also redistributes money to low wage earners, who tend to spend their all money, as opposed to richer people who save. Increases to the velocity of money results in economic growth. That's one of the counterarguments to the minimum wage argument. Society is complex and when you change the minimum wage it has rippling effects on employment, housing, consumer spending, investment and so forth. On top of that you have psychological effects and signalling issues. Predicting the consequences of a minimum wage hike is hard.
The real world is not Macro 101, and pretending policy questions like these are trivial is very very silly.
> There is plenty of evidence where raising taxes appears to produce economic growth
Please cite such evidence.
> Raising the minimum wage also redistributes money to low wage earners, who tend to spend their all money, as opposed to richer people who save.
Raising minimum wage increases the cost of labor, which will reduce hiring and trigger layoffs. Minimum-wage earners are the most vulnerable class of employees, the most easily dismissed and replaceable. As such, they will be the first to be laid off as profits decline, especially when these profits are declining as a direct result of the cost of employing them
Rising cost of labor also hurts growth directly, especially when its due to government intervention and not voluntary free-market forces.
> The real world is not Macro 101, and pretending policy questions like these are trivial is very very silly.
Except in this case all these "policy experts" and "professional economists" were apparently wrong, and instead of increasing growth, these changes hurt it substantially, just as Macro 101 would predict.
So score one for basic economic good sense versus the "policy experts".
>Rising cost of labor also hurts growth directly, especially when its due to government intervention and not voluntary free-market forces.
Fine by me. A nation that does not have either strong (and not hindered by law) unions or a minimum wage to support the most vulnerable (your mention of which in the context of your comment comes across as libertarian concern trolling) does not deserve to "grow".
>Raising minimum wage increases the cost of labor, which will reduce hiring and trigger layoffs.
My solution to this is simple - abolish the wage. But I'm interested to hear to what extent this is true where minimum wages have increased so far, and whether it must necessarily happen. Taking the argument to its extreme, we ought not to pay anyone at all, since any amount >0 is a rising cost of labour and since growth is important, we out to minimize the cost of labour to zero or even lower.
I'm thankful for the fact that the eight hour work day and humane conditions, thanks to the socialists and social democrats of the 19th and 20th c. have prevailed over your "voluntary free market forces".
> A nation that does not have either strong (and not hindered by law) unions or a minimum wage to support the most vulnerable (your mention of which in the context of your comment comes across as libertarian concern trolling) does not deserve to "grow".
Increasing minimum wage is liable to cause a host of well-known unintended and paradoxical adverse consequences:
To you it seems like a simple way to benefit the poor, but in reality it raises unemployment - a far graver problem - among these very poor you are ostensibly trying to protect.
You can flame that as "concern trolling", but these are not just very real concerns - they are real consequences that have been observed numerous times across history, including in this very case in Korea, where unemployment has risen substantially as a result of the recent minimum wage raises.
> My solution to this is simple - abolish the wage.
Truly an excellent practical suggestion for the modern growth economy.
Your comment offers zero practical solutions, or anything but empty moral posturing and inciting inflammatory language.
Raising the minimum wage also redistributes money to low wage earners, who tend to spend their all money, as opposed to richer people who save. Increases to the velocity of money results in economic growth. That's one of the counterarguments to the minimum wage argument. Society is complex and when you change the minimum wage it has rippling effects on employment, housing, consumer spending, investment and so forth. On top of that you have psychological effects and signalling issues. Predicting the consequences of a minimum wage hike is hard.
The real world is not Macro 101, and pretending policy questions like these are trivial is very very silly.