In response to your Friday editorial on the study identifying problems with Seattle’s large minimum wage hikes: Who, exactly, would be stunned by these findings? Only individuals who are ignorant of the most basic economic fundamentals.
It’s really quite simple. Give folks who are unable to participate in an auction due to a lack of funds any amount of money deemed necessary. But when members of the bidding pool have more money, prices are just bid up across all product offerings to the point that the additional money results in no improvement in position.
Price is nothing more than the market’s measuring stick of scarcity. Changing the cost of anything by fiat does nothing to the level of underlying scarcity. But it does alter the measuring units. So think of it this way: Twenty miles per hour is equivalent to 1.27 million inches an hour. Both are the same actual speed. But one certainly sounds faster to the uninformed.
In addition, why do we have to revisit this issue time and time and time again? Wouldn’t it be easier for the state to go the other way and simply declare everything to be free?