Friday, December 01, 2006

More proof that prices are a reflection of wages:

I regularly argue that raising the minimum wage will not help Americans since prices are reflection of what people make, meaning that if you raise the minimum wage businesses will raise prices to reflect the extra capital in the system. The effect is that the person who just saw their wage increase is right back to where they started because of the higher prices.

As evidence, during a conference call with the executives of the Cheese Cake Factory, they told shareholders that they would be raising the prices on their menu to reflect, drum roll, higher wages.

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