Why will raising the minimum wage cause inflation?

Question

Nike shoes cost 100.00 and are made in China, CEO and Shareholders are making record incomes. Congress has giving themselves raises. McDonalds, Wal-mart, and many other Companies have enjoyed paying no benefits and minimum wages for years but inflation happens. I find it hard to believe raising the minimum wage for a small percentage of Americans will send Inflation out of control

Answer 1

I think this is a moral question and should be asked, is it right for companies not to pay a "LIVING WAGE"? The answer is NO! The current minimum wage doesn't even compare to the minimum wage of 1968 given the buying power of the US dollar. When virtually no companies had foreign holdings. So you think that moving jobs to overseas would allow companies to pay employees more, again NO! Because of greed. As long as profits over shadow morality companies will force employees to work for little or no money if possible. It wasn't until laws were in place that forced companies to stop child labor, sweat shops, owning employees by forcing them to only buy their products etc. That workers were able to create better living conditions for their families and that didn't happen without loss of life and unions.

The biggest source of inflation is the US Government. It borrows money against the enormous debt that its' created. Forcing interest higher making it more costly to get loans for homes, cars, goods. This why after Vietnam the inflation soared, because the war created a huge debt.

Answer 2

Nice. Minimum wage laws are not enforced in China. Now let's look at Economics 101; A CEO is employed to ensure that the company remains profitable to the shareholders. If a company can't cut it the shareholders loose their investments and end up selling off all shares and the company goes out of business. Smart move... not.

Now, minimum wage is NOT, and never was meant to be, a means of making a living. Originally it was made to eliminate sweat shops. Now it is meant to supplement income, as well as to give young people a start in the world of learning about money. If minimum wage isn't enough then people who earn it had best get a second or third job, get an apprenticeship in a trade that will earn good money, or go to school and get a degree.

But back to your question: People open a business to make money in the long run, not to lose it. By forcing a company to pay more money because a specific class of people are too lazy to be responsible for their own lives, the company ends up putting more money out of pocket, thus making their net revenue less. Remember that big name businesses need to be profitable for their shareholders. So they will, and do, increase the end-cost to us the consumer. What do you think will happen when McBurger Palace has to pay their McWorkers $12.00 an hour to flip a burger, scrub a toilet and mop a floor? That Value Meal will be much more than $6.00 that's for sure.

As for benefits: It's your own responsibility to find a job that offers health insurance and sick leave. Nobody is holding a gun to your head forcing you to work for minimum wage and no benefits.

Lastly, it's the illegal alien that's doing more harm than good to our economy. They're the ones taking these low paying jobs without benefits because the government provides them with free medical and dental. They drive down wages because they're willing to work on the cheap. Look at what construction, janitorial and the likes were paying 20 years ago, compare it today, adjusting for inflation. The pay has gone down. The way to increase pay and force companies to pay benefits is for people to band together and refuse to work for those companies.

If you still find it hard to believe raising minimum wage (aka cutting into the profit margin of the shareholders) doesn't have any effect on the economy, then may I suggest you take a class on basic economics which will explain how the real world operates.

Answer 3

This is the neo cons talking. In the past raising the minimum wage has led to some inflation, but far less than the neo cons will admit. The rise has been minimal. The next raise will likely be nonexistent as most companies already pay well over minimum wage in order to get good workers.

The neo cons are just using inflation as a scare tactic to suppress wages (see also the neo con support for illegals working here in the States.) Keep down wages at the bottom and wages stay down across the board. Imagine the horror of fellow Americans actually earning enough to get off of welfare.

By the way since we have a minimum wage: Why don't we have a maximum wage?

Answer 4

The whole purpose of the minimum wage is that workers will take that job, wakeup and say "this job sucks" and get a better one, improve education etc. Most people stuck in those jobs were the lazy students that sat around telling everyone why they didn't need to study or pass tests. You made you bed, now lay in it.

Answer 5

Because raising wages doesn't do anything to the actual value of the job. Wages go up, employers have to raise prices to cover the extra cost. Ta da: Inflation.

Answer 6

Your Government will LIE to you.
When a sheriff runs for re-election crime is down woo hoo.
When a sheriff submits next years budget- crime is up, more deputies neeeded.
You lie to fit the time.

Geedy people want to keep money in their own pockets.
Fast foods raise prcie to offset any min wage increase. never in the history of this country has wage increase resulted in losses.

The opposite is true--more spending- more business- also more tax revunue

If this was true the Federal and State Gov would NOT give yearly
wage increases.

PRIVATE business operates at a far greater profit thn the GOVERNMENT--
BUSINESS IS SUPPLY AND DEMAND>
people will eat-smoke- drink-buy cars-gas-clothes.
mark up is peanuts compared to minimum wage.

THINK!

Answer 7

An increase in the minimum wage causes the price of goods to increase, because payroll is part of the costs of manufacturing goods and providing services. It's a direct relationship.

Answer 8

When you raise someones wages you are cutting into your profits and operations costs. So the prices get passed along to the consumer. Prices go up and causes inflation.

Answer 9

it wouldn't. Some citites and states already have raised minimum wage. Thats just a lie they feed the ignorant to sweep the issue under the rug. Its been found that in those locales that have raised minimum wage its actually stimulated the economy in a positive way..

Answer 10

Walmart and McDonalds and the other large corporations are not willing to pay it so they will spin any story in the media to make sure it doesn't pass. This is the same issue with universal healthcare, the large companies will not pay it so they lobby to make sure the government does not pass such a bill