[clearwind]

> Legislating people's favourite lucky number

Woah, horsey. For most HN readers including you and I, it looks like just a “lucky number”, but to the people it matters it is everything. Financial security is for most intents and purposes the first rung of being happy.

> There are a lot of people who don't have a family.

Social support per child can account for this. It’s a politically vulnerable policy, as it ‘seems intuitive’ for smart people that this would ‘incentivise child-rearing’. But upon leaving the blue sky anyone would realise that a normal person doesn’t calculate their life so coolly in quite that imagined fashion.

To pre-empt a counter-narrative about minimum wage - inflationary effects - it’s worth noting that modern countries both seek mild inflation and regularly enact policy which expect some inflationary outcomes.

Trickle-up benefits are known to be far more beneficial to all of society, which includes incumbents, than trickle-down policy. This also in time offsets the inflationary effect somewhat on the supply side.

[eru]

Nah, serious economist don't believe minimum wage legislation causes inflation.

Inflation is a monetary phenomenon. Central banks control that.

If you are actually looking for non-strawman arguments against minimum wage:

First, see https://web.archive.org/web/20220217044208/https://blog.jaib... (Basically, don't punish employers for interacting with poor people, nor reward other folks for successfully avoiding interaction with poor people. If you want to help poor people, give them money.)

Second, employers are paid with a whole basket of goods, and money is just one of component. Training, working conditions, flexibility etc are others. A minimum wage makes some of these baskets illegal, even though they might be mutually agreeable to all parties involved.

> [...] than trickle-down policy.

'Trickle-down' was only ever used as a strawman.

[imtringued]

Central banks don't control money. People who hold onto money control money since the central bank is forced to make as much money available to be lent out as much as is being saved because savings = investments must hold and allowing savings to go down to the level of investments is frowned upon (negative interest means savings exceed investment).

[eru]

Central banks don't control real variables. But they do have a quite a big impact on nominal variables.

> People who hold onto money control money since the central bank is forced to make as much money available to be lent out as much as is being saved because savings = investments must hold and allowing savings to go down to the level of investments is frowned upon (negative interest means savings exceed investment).

Huh? Could you please explain?

First, not all saving happen as loans.

When someone harvests wood from her property and burns the wood in her fireplace, that's consumption. If she uses the wood to build a shed, that's investment. (No market involved in this example.)

Similarly, when I invest in a startup vs when I buy food, the amount of money needed for either activity is basically the same. One is saving/investment, the other is consumption.

When people save money in the bank, the bank typically turns around and loans that money out (or invests it in other ways). The money doesn't just pile up at the bank.

Now you are right that people often hold on to cash and that banks keep a certain amount of reserves around. Some amount because of regulatory requirements, some because it makes business sense. (You can clearly see the latter in countries that have no regulatory reserve requirements for banks.)

Also keep in mind that saving and investment are increasingly global phenomena: people from one part of the world can invest in other parts of the world. Eg Chinese people buying American stocks does lower the real cost of capital for American companies.

Inflation is a local phenomenon. Eg Japanese deflation and Zimbabwean hyperinflation cause neither deflation nor hyperinflation in Switzerland.