Supply and demand

Are you gonna buy the cake? Probably, you're probably gonna buy three of them, right? The price matters.

And what's happening there is an example of supply and demand.

And supply and demand doesn't just affect the products that you buy, it affects the wages that people earn.

When labor is tight, when there are not enough employees to go around, What do businesses do? They have to increase the amount of money that they are paying even if the minimum wage is $7.25 an hour.

If no one is going to work for $7.25 an hour, you've gotta go to $10 or $12 or $14.

And if you hire someone for $14 an hour and say they're producing three times as much as that in value, you know what that business's competitor is going to do? Hey, come work for me, I'll pay you $22 an hour.

That's how supply and demand works.

And you see that even in places with higher minimum wages than the federal requirements.