In states below a $15 minimum (all of them right now) increasing wages means a hit on profitability. In the worst cases, going from $7.50 an hour to $15 means that each employee will cost you $300 more per week in wages and added to that higher payouts for unemployment insurance, employer part social security, employer part taxes, etc., meaning roughly $500 per employee. Let's say your business has 10 employees at $7.50 an hour. That's about $5000 a week you have to cough up to pay them and satiate the government. For a small business, that could be door closing. For a large company with thousands of workers it's going to be unaffordable.
The thing you are deliberately or inadvertently forgetting about all this, is that the people at the lower end of the income spectrum are also the ones most likely to spend money in the economy, thus creating demand.
Because, as I'm sure an amateur economist like you knows, an economy can only grow by demand.
So how does one increase demand? Simple...pay people more money to spend. We know that stimulus is most effective when it's directed at the bottom, rather than the top. So by lifting the minimum wage to $15/hr, we end up SAVING money on welfare programs that are income-determinant.
So the choice really boils down to this:
Do you want to spend less or more on social welfare programs? Because a higher minimum wage means you spend LESS on things like SNAP, Housing Assistance, etc.
It could encourage fewer to pursue education.
Not if Public Colleges are free.
It will encourage businesses to automate big time.
They already are automating and have already done that. Where have you been the last 30 years?????
Then there's the trickle up effect. If the line workers are getting $15 an hour now instead of say $7.50 and the manager was making $15 an hour, how much do you have to raise the manager's wage?
ZERO. You don't have to raise it at all.
For some companies, off shoring will become attractive.
You mean those who haven't already done this? Like who?
The cost of goods and services will go up.
Nominally, maybe. Incrementally, perhaps. But drastically? No.
Future raises will be fewer and further between.
Most workers don't get raises now.
A big mandatory raise like that certainly result in companies withholding raises in pay for whatever
Why would they do that if their revenues are also increasing thanks to more people having more money to spend?
Over time, things like a smaller wage gap, etc., will disappear as the market corrects itself to the new norm.
Do you...do you think the wage gap is equitable now??????
