Regarding the increase in the US minimum wage?

Question

I can understand the politicians wanting working people to have a decent wage however where do these people think the money is coming from? Businesses are in the business of making money so when they are forced to increase their wages the price for their goods is bound to go up to make up the difference. In other words the ones who will be paying for the cost increase will be the consumer, you and I. The price of milk, bread, eggs, ect will all go up. It has happened every time minimum wage increases, so isn't it all a relative thing anyway and that increasing wages will in the long run do nithing but devaluate the dollar? Can't they see this and work to fix the real problem,,,, the cost of raw material, employee insurance, health care, all that stuff that humans need and so on? In the end raising wages means nothing if prices go up. If it costs a penny or a nickel, a piece of penny candy is still a piece of penny candy. Am I wrong in my thinking? Thank you for your thoughts.

Answer 1

Good thinking. The real world isn't always a two variable model, but many people can only think in two variables. In this case, they think "raise minimum wage" results in "higher wages for the poor." One other answerer mentioned that he thought the higher costs would come out of the owner's earnings.

Guess what? Owners, like everyone, are self interested and they aren't going to willingly give up their income. Some will look for efficiencies and technology to replace some labor in order to control that cost. "Hmmm...I don't do a lot of business from 9am - 10am on Saturday morning, I'll move my opening time back to 10am." Or, "It didn't make much sense for me to buy the mowers with the larger decks when labor cost $5.50 an hour, but now it makes sense. That'll boost productivity and pay for itself in less than a year in saved labor costs (i.e. some worker is losing pay)." Those few innovators will figure out ways of managing the higher labor costs and the methods will spread to other business owners.

That's just one of many outcomes that are likely. Another possible outcome, higher school drop out rates - something everyone should agree isn't positive.

The sad thing is that most people who think they are doing good by raising minimum wage never even comprehend they may be doing more damage than good.

Answer 2

I DO NOT think they should raise the minimum wage. I am 24 (and a single mom, not on any state aid either) I have not worked for Minimum wage since I was 15. I could not live on minimum wage. I don't even know anyone who makes minimum wage. So minimum wage is $5.15 an hour and that is well below poverty level, $7.25 an hour is still below poverty level. Not to mention that people would be getting a raise for doing the same work even though they may not deserve one, and people who have been raised from minimum wage will be put right back in the same pay scale as the people who didn't earn it. Prices will increase and nothing else would change. This sounds like a great idea! Who works for minimum wage anyway? Get real. A single person can not support them selves on that. Which leads me to believe that the people who are financially supported and "live off the system" have a reason to. They actually benefit more to stay home and "look 4 a job" then take a small paying job. The minimum raise increase is not going to help any of these people either. Is this sick to anyone else?

Answer 3

This is an issue the federal government should remove itself from for many reasons. I don't disagree with a minimum wage but the most basic reason is that the states should be allowed to set these levels. The economy in California or Maryland is not the same as the economies of Kansas or Pennsylvania. $8.00 might be a good minimum in Maryland but it may crush the economy of Pennsylvania. An employer who is paying $8.00 to an employee also has to match almost 7% in social security taxes plus pay into an employee compensation fund as well as other benefits depending on the state. This can easliy drive up the cost of that $8.00 employee to $12.00 or more.

Leave it to the states they know what they need best.

Answer 4

First off, the cost of labour is one of many many costs going
into delivering a product or service. Second, the minimum
wage in reality applies to a small segment of the total
work force and primarily affects certain sectors of the economy much more than others - i.e. agricutlutre, student workers, and low skill workers. The intent was for employers not to take undue advantage of these groups of workers, assuming that
for these workers its their main source of income. In practice,
the min wage workers are contantly in flux and while raising it
in certain areas is good for the employee's quality of life, raising
it hurts in other areas - like part time retail sales clerks, waiters, etc where most of these workers are students and cleary are not making it their full time profession.

You object to raising min wages - it doesnt solve the "real" problem and just makes everything more expensive, according
to you. So why do people in most professions get raises
every year? There's tons more people in the professions and making above-poverty level salaries then there are making min
wage - they get raises every year (except in a few cases). Is this
okay? This has a far more impact on inflation than min wage.
Dont forget min wage has not changed in like 7 years or so.

The min wage is low level noise and another one of those special interest issues not affecting the majority of workers.

Raise it up or down.....does it really matter that much except
for the votes it brings in?

Answer 5

It is a weird, cyclical thing, and it can be very difficult to weigh properly. I do think they need to raise the wage to keep it competitive and realistic, but I also see where most of it is just going to came back to bite the working person in the form of increased prices. The thing about that though is that it will be spread around to all consumers, not just a direct hit at those who work for minimum wage, see?

Answer 6

the "minimum wage" law is a political tool to get votes,plain and simple. you are correct, there aare many reasons prices and wages go up (or down). For example in the airline industry, many pilots and flight attendants salaries/wages have gone DOWN in recent years, due to poor business and the effects of 9/11, etc.

to prevent this from happening to you, try to get a job in an industry known to be in high demand for the next 20-30 years, and also save at least 10% of your earnings by investing in anyting from savings bonds to mutual funds.

Answer 7

I think Chris Rock said it best when you said Companys that pay their employees minimum basically says if we could pay you less we would. The fact on everyone that makes minimum wage no matter where your at in the US is on poverty level or below. I dont think its a matter to the gov of devaluing the dollar but the the US people to improve their quality of life....Right or Wrong thats the world we live in

Answer 8

You think that a business "owner" has the right to make as much money as he wants, when it is the employees who create the value of the investment. So your one-sided presentation of the situation is illogical. Only sheep put up with that. The wage increase is taken out of the owner's profits, just as the profits had been taken out of the workers' potential and deserved wages. Second, when employers whine that they might as well just shut down the company, they are bluffing. You're lying if you present it your way, knowing full well that you are pretending that profits are written in stone.

Answer 9

Thank you for yours.The country needs people who think like you and others.People who have good ideas of what could be done.Do us a favor and run for some political office.