Originally Posted by
pathetic sheep
Ben will also spend that $8. It has been shown that low wage workers spend paychecks much faster. Often minimum wage workers consume the entire check the same week it is received. High velocity money boosts the economy. Ben is going to make car payments, pay rent, get cable, and maybe take Suzie on a date to fast food place.
You would expect some inflation. But the effect of past minimum wage increases was much lower than would be expected. The increases to minimum wage were almost entirely absorbed by lost profits. I should probably find the source for that. I have heard it multiple times. But that is for legal workers like your Ben.
For illegal workers like Jose the wage difference will be exclusively criminal profits pocketed by farmer Joe. The market price for commodities will be set by legal industry. A lot of that will be spent on land purchase. You get inflation from higher land prices. It will be harder for Ben to find work because there are fewer legal farms hiring.