Tag: Corporate Profits

Misconceptions: Raising the Minimum Wage Does Not Automatically Lead to Inflation

In recent weeks, I have had the very same conversation with a number of my friends. Each time I’m told that they were participating in a discussion about the minimum wage when someone claimed that there was no point in raising wages because firms would just raise their prices to cover the increase. This is a very intuitive, appealing argument, but it’s deeply misleading and fallacious. Let me explain why.

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The 3 Ways Governments Raise Money Part I: Taxation

One of the things I’ve noticed lately is that there is a lot of confusion about how governments finance themselves. Many people try to make sense of the state’s finances by extrapolating from their own experiences with household budgets or running businesses. This leads to a lot of misconceptions, the most prominent of which is the idea that whenever governments borrow money, they must be acting irresponsibly. So I’m embarking on a 3-part series that I hope will clear things up for some people.

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