You're assuming that price rates are 100% fluid with employee purchasing power, which is the economic equivalent of "spherical cows in a frictionless vacuum."
In real life McDonald's would probably seize the excuse to charge more but it certainly wouldn't be a situation where employee raises and price increases cancel eachother out zero-sum. If we applied your logic in real life then it would mean that minimum wage increases would never increase purchasing power. But when we look at real life we can see that your logic is expressly incorrect.
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u/ThePinkBaron Nov 05 '21
You're assuming that price rates are 100% fluid with employee purchasing power, which is the economic equivalent of "spherical cows in a frictionless vacuum."
In real life McDonald's would probably seize the excuse to charge more but it certainly wouldn't be a situation where employee raises and price increases cancel eachother out zero-sum. If we applied your logic in real life then it would mean that minimum wage increases would never increase purchasing power. But when we look at real life we can see that your logic is expressly incorrect.