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Locknuts on 04 February 2016
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SvennoJ said:
Locknuts said:

Ah but up until recently, a lot of money has been leaving the economy as people can buy goods from cheaper markets overseas online (I'm Australian).

Only the Aussie dollar being driven down and the subsequent exchange rate differences have allowed money to remain in Australia for the most part.

So in effect, raising minimum wage -> causes inflation -> lowers exchange rate -> more money remains in (and gets into) the country -> profit?

No. Increasing inflation does not generally cause the value of a currency to drop significantly. This only happens in extreme circumstances.

My understanding is that the drop in the value of the Australian dollar was a combined effect of the Reserve Bank intentionally putting downward pressure on the AUD and the end of the mining boom.

Our dollar needed to drop as it was pushing $1.10 US, killing our exports (but great for buying games from overseas).

That said, I think a relatively high minumum wage is a good thing. I was on minimum wage when I bought my first house! In how many countires can people say that!? 

So as long as you don't go crazy and cause small businesses to stop employing people, increasing minumum wage to a level the market can tolerate is great!