Originally Posted By: Kage860
Your logic is flawed. Let’s say store x pays its employees more, that doesn’t mean that its CUSTOMERS will spend more money, all else being equal it only means that its employees have more money to spend at OTHER stores, so store x makes less money, not more. QUALITY of emplyees hired at different wages is another argument that is valid but not the one you are making here. On average employees are basically worth what they get paid, if they are worth less an efficient employer will fire them, if they are worth more in the marketplace then they should quit and work where they will be paid more. This is called quit rate, and it would force the market to correct and wages to go up.
Based on your logic minimum wage should be $100 an hour and everyone would be rich.
I see it a different way.
1) All employers are paying the same because they are all learning from each other which is why wages are stagnant.
2) People can't quit and work elsewhere for higher wages because there is a lack of these higher wages and a lack of jobs in general for them to run to versus yester year where jobs were abundant and employers were forced to pay more to attract candidates. (It's an employers market at the moment)
3) People will always spend the majority of what they have. Yes some of it gets parked in savings but this is just spending that happens at a future date which benefits the economy more long term. No money is ever parked forever. Well that is unless you are in the top 1% and have so much you can park it forever.
You can't have a functional economy unless it's cyclical and money is changing hands. Right now it's like the corporations put a siphon onto this cycle and have diverted money into a holding pot while still expecting the cycle to continue to go around and keep growing. It's not gonna happen because they have drained off too much momentum.