The writer of this LTE reasons that consumer price inflation reulting from a $15 an hour minimum wage will be offset by lower taxes as the welfare rolls are cleared through higher employment. This assumption is a leap of faith for several reasons:
- There is no certainty that government will reduce taxes in a way the writer will notice in her own personal finance budget.
- Because government is a consumer, too, its own costs for consumer goods will rise.
- The higher minimum wage will cause some unemployment in its own right.
The economy is too complex and unpredictable to be sustained by glibly reasoned public policy. All else being equal, it is usually best to just allow markets to function as they will.