Toddsterpatriot
Diamond Member
Here is where they showed it is positive even in the short term:Not with a multiplier of two.
The CBO disagrees with your feelings.
This is where they considered the multiplier:
In the short term, an increase in the minimum wage can boost the employment of low-wage workers through changes in the economywide demand for goods and services. A higher minimum wage shifts income from higher-wage consumers and business owners to low-wage workers. Because low-wage workers tend to spend a larger fraction of their earnings, some firms see increased demand for their goods and services, which boosts the employment of low-wage workers and higher-wage workers alike.
This is where they considered the multiplier:
View attachment 458448
This is where they show the multiplier is negative.
In the short term, an increase in the minimum wage can boost the employment of low-wage workers through changes in the economywide demand for goods and services. A higher minimum wage shifts income from higher-wage consumers and business owners to low-wage workers. Because low-wage workers tend to spend a larger fraction of their earnings, some firms see increased demand for their goods and services, which boosts the employment of low-wage workers and higher-wage workers alike.
And, we already know higher-paid labor creates more in demand and generates more in tax revenue in every long-run equilibrium.
If output was reduced, that means it's a negative. Even in the short term.