This is how it works.
There’s a small business owner in rural New York. Let’s call her Cindy Lee, because Cindy Lou is already spoken for. Let’s say she owns a bowling alley.
The economic strangulation caused by COVID-panic did nothing for her business, which is now hanging on by its fingernails. Neither did the famous “fight for fifteen,” a looney move to boost the minimum wage to $15 an hour pushed by the economically illiterate Liberal elites of the state, including the leadership of the trades union movement.
Of course New York workers, including Ms. Lee’s employees, were delighted to find more money in their paychecks. Thank you, Democrat party. Thank you, Union Movement.
The smiles evaporated when another group of economic illiterates called the Biden Administration tried to eradicate post-COVID misery and economic doldrums – and make themselves Saviors of the Planet in the eyes of their credulous far-left green colleagues by dumping a truckload of money on a staggering economy. The results were perfectly predictable; they could be seen FROM SPACE. Just not from Washington, D.C.
An increase in the amount of money in a market, absent concomitant increase in productivity and available goods, will create inflation. Always has, as far back as the Roman Republic. Always will. So, given this gulp of gas, prices took off like a Dodge Demon leaving Launch Mode. And what was the result?
New York “labor activists” are now campaigning for a $20 minimum wage because, well, $15 “was starting to be not enough,” to quote one booster. I doubt he ever paused to consider what was behind the price increases that ate into his wage gains, or if he just swallowed the Left’s hogwash about “greedy corporations” because that way he didn’t have to think.
Cindy Lee could tell him. “I’ll definitely have to cut corners if wages are raised,” she told an interviewer. She mentioned increasing prices on bowling, food and liquor – in other words, everything she has to sell.
Nor is she alone. Most businesses, big and small, will also have to cut costs, raise prices or both thanks to Bidenflation. Without dramatic productivity increases to push more goods and services into the market, soon $20 an hour will “start to not be enough.” Politicians, from the panderers in the Biden Administration on down, will pour on more money and advocate higher wages. Prices will rise. No one will care much about productivity, because it’s an obscure topic that doesn’t vote and isn’t easily fixed by a soundbite.
Stagflation, here we come.
