How does raising wages make for mre "potential employees?" And what is a "potential" employee? Do we not want more "actual" employees?
1. For under $10/hour, I'm not going to drag myself out of bed. For $30/hour, I will. Increase wages(amount you're willing to pay), increase the supply, classic economics. Note that I'm semi-retired.
2. A 'potential employee' would be somebody out there looking for work.
3. Yes, we do want more actual employees.
There are indeed times I'd like to start up a 'federal jobs program' that works a bit like it's out of Heinlein's Starship Troopers. Keep in mind people, that in exchange I'd be killing all the other welfare programs.
And yes, even without that I'm a strong advocate for graduated welfare benefits. If we have to pay them, they should be graduated such that your getting work is still beneficial. I used to be for a 50-50 split, then I realized that it's often just not worth it to got to work for 8 hours at a $10/hour job when, even assuming no taxes, we're going to be chopping $5 worth of benefits from it. $40/day, when you figure in lunch, miles, clothing, etc...? Often not worth it. So today I'm more like 20%.
I'd rather keep paying somebody 80% of their benefits while they're at least working part time than 100% to sit on their ass.
How does making a employee more expensive for the employer better?
Supply side economics. The theory is that the employee, being a person, tends to spend his wages. Thus, increase the money he has and he goes out and spends it in stores and such. They've done studies that giving a really poor person $1 puts 5 into the economy vs only $1-2 for the rich guy. The idea being along the lines that the poor guy actually gets a haircut at a barber, the barber spends the extra money from more haircuts having his shop repainted, the painter gets to buy more steak, the rancher buys more feed, etc....
While price increases are indeed a problem, generally the increased income outweighs the increased costs.
Now, I have heard some northwestern states/cities have raised the wage .... and supposedly this has had a beneficial effect, rather than the supposed negative one. But I wonder what other forces were at work to do that, that the MSM ignored -- or were totally unaware of from the start.
It's actually quite a few states at this point. I don't completely understand it myself. I think it has to do with an imbalance, a sort of tragedy of the commons. The rules are such that the 'rich' are winning 'too much' and their money doesn't have the 'velocity' of money of poor people. By increasing the minimum wage, none of the business owners paying it actually lose out all that much because they're still on an even field. Faster money is 'better' in that because it changes hands faster it generates more economic activity(and yes, more taxes). Basically, in a few very strategic spots economic relief and even welfare generates more taxes than it costs. Giving rich people more money doesn't work nearly as well.