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by lesuorac
978 days ago
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0.4% you say but that paper says 0.7%. However, lets be real 10% to 1% vs 10% to 0.7% still gets the same message across. But I'm still really not sure what you're trying to argue. My claim is that a X% wage increase will be followed by an <X% increase in inflation and so far all anybody has done is backed up my claim. This isn't even rocket science. For any product you'll spend say $10 on labor, $15 on marketing, $5 on parts for a total of $30. If your labor costs goes up to say $20 then the total cost is $40 and one could expect the price that the 200% increase in wages lead to a 25% increase in the products price (inflation). > In the base specification (p. 162), which included only monthly and yearly controls,
the cumulative wage-price elasticity from three months before up to three months after a
minimum wage hike was estimated at about 0.07, meaning that a 10 percent increase in the
minimum wage is associated with a 0.7 percent increase in FAFH prices. Aaronson, French, and
MacDonald (2008) used microlevel restaurant price data for the period 1995–1997, during which
two changes to the federal minimum wage were implemented, to generate a wage-price elasticity
of, again, about 0.07. 3 Though the empirical literature is somewhat limited outside of these two
formative works (see Lemos [2008] for a review), other studies have found similar results in
other countries and other cases. |
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The claim that it lags behind the wage change is empirically also not found.