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asked ago in General Economics Questions by (190 points)
I'm considering a paper on structural economics and social insurances, or maybe multiple papers.  This is more of a soft observation, and I'm not 100% certain anyone else has made the observation yet.

In structural economics, I've proposed that things like minimum wage should be set by a correlate of the per-capita GNI.  With just inflation indexing, minimum wage falls relative to the average income, creating a broader span of low-income workers and a huge supply of poverty-class laborers.

Around social insurances, I've made the observation that well-targeted welfare programs cause economic stasis at poverty in poor local economies because welfare raises consumer effective demand and thus creates jobs, and then welfare goes away when people get jobs.  The support for jobs vanishes, unemployment increases, welfare comes back, and you get stuck in a cycle.  This happens largely because the first jobs are non-coupling:  as people rise from poverty, they first consume goods and local services, and so you get retail and local shipping instead of anything that sells to the surrounding economies.  You don't get new net inflow of income.

There are other things branching from these—notably a social insurance that solves the second problem and acts as a zero-deficit economic stimulus, ending all recessions—but that gets weird.

Thoughts?  Did I miss any papers already covering these topics?

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