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Originally Posted by ManM
Perhaps an economist could explain to Pelosi how a minimum wage increase would affect the labor market.
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Under most circumstances it would mean an across the board increase in the cost of labor. However, relative to the cost of management, the cost of labor in relation to the CPI index has remained nearly static over the past six years. Plus, the productivity of management has been less than stellar and many of the functions once part of the labor market in the United States have been shipped overseas to take advantage of cheaper labor markets. This move has been uniformly detrimental to both consumers and workers, as the quality of service has declined considerably and customers have been encouraged to seek out alternate service and products where they do not have to deal with the mistakes made by outsourcing management decisions. In other decisions which crimp the economy, the redistribution of much of the nation's income towards those who have fewer needs (by subsidizing the wealthy at the expense of the lower economic eschelons) and resulted in a much less vigorous dollar due to reductions in the velocity of money.
Increasing wages and salaries at the lower economic levels and ending the subsidization of the wealthy should act to stimulate the economy. The problem which might arise as a result would be an inflationary trend. This could potentially be countered through increases in lending rates and constrictions upon bank-to-bank lending. However, redistributing labor activity from high-paying non-productive armaments into peacetime production would go a long way to dampen the short-term uptick in expected spending as the relieved debt-ridden pare down their debt loads and upgrade their living standards.