Does anyone think that rasing minimum wage is what lowered the interest rates?
Yeah, the effect of the minimum wage on the economy at large is pretty minuscule, except that it acts as a wage floor to prevent wages from going to subsistence. I think you raise an interesting hypothetical, which is can labor, by asking for higher and higher wages, cause a recession? I think a lot of economists would agree with you. In fact, one of the models of recession/expansion is that when prices rise, they rise quicker than wages, so that there is an increase in output. And a recession is the opposite: prices fall, there is not enough time for wages to fall, so businesses costs rise and people are laid off. But it would difficult to explain the current recession on that,. since we have an increase in prices. It is more likely this recession is caused by high oil prices or the collapse of the real estate bubble.
