Supply and Demand

demand_supply

This is an article about the housing market in San Francisco and how prices have shot up with the emergence of thousands of rich people. A classic example of demand vs supply.

The Housing Market With Nowhere To Go But Up

This is also why raising the minimum wage doesn't necessarily help those earning it. You've basically increased the number of people with more money by however many people earn minimum wage, which could be a huge amount. More money means they buy more. Demand vs supply, prices go up. Which means those on minimum wage are right back where they started of not being able to afford anything.

This is the situation in Australia. I suspect looking at other countries with high minimum wages will reveal a similarly high cost of living.

The idea is that even in places with traditionally high costs of living, such as New York City, there will still be a market catering to those who earn less - cheaper food options, cheaper shampoo, cheaper rent options further from the city. In a place with high minimum wages, this market dries up and even the cheapest products become more expensive.

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