Kevin Bae

Non-Social in a Socially Networked World

Idiotic WSJ article on minimum wage ignores supply in deference to demand

The article linked by this post is utter nonsense. They infer that people can’t afford housing because the minimum wage is too low. They report nothing about the lack of housing being built and government policies in most large cities preventing developers from increasing the supply.

The biggest expense for most Americans—housing—is unaffordable for people making the federal minimum wage in some areas, especially those where state governments have already increased the minimum wage above $7.25. This wasn’t the case 50 years ago. With a median rent of $117 a month ($809 in 2021 dollars), minimum-wage earners working 40 hours a week in the Atlanta metro area would have more than half of their pretax wages left over to spend on other things. The equivalent worker today would need a roommate or housing assistance at the state or federal level to have any more income for food and other necessities.

Wall Street Journal

Just look at post-COVID-19 NYC. People moved out of Manhattan in droves looking for more space, more freedom, or both. The result is a massive increase in the supply of available units. And magically rents came tumbling down.

Pre-pandemic, NYC rents had been steadily rising for about a decade. But the economic fallout from COVID-19 has taken a severe toll on the market, the report notes.

“We expected the rental market to match the weakness seen during the Great Recession, but the fact that the market has surpassed that level in less than one year shows how serious the crisis caused by the pandemic has been,” StreetEasy Economist Nancy Wu said in the report. “The rollout of COVID-19 vaccines and plenty of great rental deals will be the catalyst for many to return to the city, but we’re still a long way from the city’s return to normal. Until that happens, inventory will remain high and renters will continue to enjoy deals that were unheard of a year ago.”

Yahoo News

The Law of Supply and Demand is real. It ain’t no fake news people.

Then the WSJ proceeds to compare the cost of goods from 1968 to today. Of course, they do not look at the rise in the cost of labor or regulations since 1968 either. They take the most simplistic look at what a Big Mac or a gallon of gas cost in the past. They’re also not taking into consideration the massive amounts of money the Treasury is printing, especially during the pandemic, that severely devalues the purchasing power of our money.

What a load of crap!