What you didn't mention Jerry, that such an increase in the minimum wage would increase the black market/underground economy by leaps and bounds. Thus having a long run effect of shrinking the gnp. Laura Bell business and economics writer On Fri, 1 Dec 1995 [EMAIL PROTECTED] wrote: > Paul Zarembka wrote: > > > what about the demand pull economic growth that could result from > > providing modest living standard? > > Increasing the minimum wage to $10/hr. would increase aggregate demand to > the extent that the increase in the minimum wage would raise income and > spending ... *but* it would also lead, perhaps, to less domestic > employment and an increase in capital flight and that would lower income, > spending, and demand within the economy. > > Perhaps there are some econometric and/or game-theoretic studies on this > issue. I suspect that if there was a marginal increase in the minimum > wage then what Paul is saying would come to pass. I am less convinced > regarding such a dramatic increase in the minimum wage. > > Jerry >
