
The Capitalist’s Case for a $15 Minimum Wage - pauljonas
http://www.bloomberg.com/news/2013-06-19/the-capitalist-s-case-for-a-15-minimum-wage.html
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dossy
> "The problem comes down to this: My annual earnings equal about 1,000 times
> the U.S. median wage, but I don’t consume 1,000 times more pillows than the
> average American. Even the richest among us only need one or two to rest
> their heads at night."

I still can't believe the number of times I've seen this "argument" used,
given how silly it is.

Why is it silly? Because, it's saying "I'm willfully ignoring the wealthy
person who invests in creating a new 800-room hotel, where each room will get
2-4 pillows, each. Now, I'm a person who earns 1,000 times, and will consume
anywhere from 1,000-16,000 more pillows than the average American per year,
assuming the average American uses their pillow for 5 years vs. the hotel
which will have to replace them annually (or sooner)."

If you look at the spending of a wealthy person by examining their personal,
individual spending, alone, you're missing the macro effect of wealth. Look at
what they spend their money on as a whole, and you'll see that there is an
inequality in value created vs. wealth - having 100x more wealth does not mean
being able to create 100x more value - it's not linear - with more wealth, you
can create disproportionally more value, and that's why the wealthy are happy
to continue to subsidize the poor's existence because overall, there's a
bigger benefit.

~~~
chrisbennet
Who will stay in that "new 800 room hotel" now that the middle class is going
away? Nick points out the old "the wealthy generate jobs" saw is backwards.
Companies have record amounts of cash reserves but aren't hiring because of
low demand. Companies hire workers only when they can't meet demand for their
product. No customers = no demand.

