Bill Cullen had this postscript in a discussion about the bus strike:
P.S. Jennifer Pedersen wrote "I'm amazed how many people look at the bus
drivers' wages as if they are taking something away from the rest of us."
How can we increase anyone's wages/benefits without taking money from
someone else? There must be an economic model I am unaware of....
To which Chris Johnson responded:
Bill, I am no economic expert, and I am probably less capable of explaining economic
theories I barely understand. But I do believe that it is generally agreed by
economists that not only is it possible to raise everyone's wages (or standard of
living), without making someone else suffer a loss, but that this has actually
occurred continuously except for brief recession periods since World War II.
One explanation is that those people with more wage money spend much of it, putting it
back into circulation to be available to raise others' wages. If everybody put every
additional cent they earned under their mattresses, maybe there would be a problem.
My response:
The only way that increasing bus drivers' pay would benefit everyone would be if it
resulted in increased production. And the only way that could possibly happen would
be if we added money to our economy. Theoretically, adding money to the system MIGHT
benefit the entire economy, when the economy is lagging due only to the lack of funds,
and not due to some other bottleneck. But even if that works, it will work only when
you use deficit spending. We can't do that in Minnesota, so any increased wages of
the drivers have to come out of either bus riders' pockets or taxpayers' pockets.
Maybe the bus drivers spend more money, but the rest of us spend less. No net
benefit, and a loss to those of us who pay for these increases.
Mark Anderson
Bancroft
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