Under Sanders, income and jobs would soar, economist says

Hey! Economics degree here. So, you're correct, but remember the very first thing they teach you- models are just models, and as such, are very simplified. In this particular example, minimum wage increases should result in job loss if the new minimum wage is above the equilibrium wage, with no other factors affecting the labor market, and featuring a static demand.

These assumptions have a few issues. Firstly, noting the significant amount of government assistance that companies like Wal-Mart take advantage of (or the food drives for their own employees), we know that the wage they pay workers is artificially low compared to what is needed to survive. As such, this low income reinforces consumption of inferior goods, which in general, lead to a "race to the bottom" scenario in production. Companies like Rent-A-Center pop up, and are able to attain huge profit margins off the poorest people.

On the other hand, if the minimum wage were higher, people might be able to save money, or be able to consume exponentially better goods for just a bit more money. They could purchase instead of renting. They could invest in their futures instead of digging themselves out of their pasts. All of this new consumption and new investment leads to new markets, and new sources of demand, which in turn, lead to new jobs.

Throw in healthcare keeping people working, throw in education making people more productive, throw in infrastructure helping people get to their destinations faster and cheaper. Our economy will thrive with investments like these, not only on a national scale, but on a global scale.

/r/SandersForPresident Thread Parent Link - money.cnn.com