Is there any benefit to an increased minimum wage?

Question

The way I see it, any possible benefit to those making minimum wage would be offset by the increase in price of goods and services by businesses trying to offset the increased cost of labor.

lil' mama

I don't doubt that it is difficult or impossible to raise a family on $5.15/ hour. I just don't understand how this will make it any easier. Businesses that pay these wages will incur an increased cost in labor. In order to offset this cost and remain profitable, they will need to increase prices to make up for the extra cost. Thus, your increase in wage is offset by increased prices and you have no more buying power than what you had before.

In a lot of industries, particular big-box retail (Wal-Mart, Target, etc.) and the grocerey industry, businesses are lucky to have a profit margin of 1 or 2 percent. If you increase labor costs a mere 5%, prices will need to be increased to remain profitable.

So how does this increase actually help those that are trying to make a living on minimum wage?

TL,

Your "catch-up" idea does make sense. However, in the long run there is no meaningful change.

Answer 1

I actually heard an argument that increased min. wage is detrimental because it makes low-skilled workers not worth the wages and weeds them out because they cannot produce materials worth the higher minimum wage. This of course seemed flawed to me since all goods should be raising in price (if they have not already), so the ratio should not be affected all that much.

I think premise behind it is that the price of goods are steadily rising, regardless of the wages. Every few years they approved a higher minimum to sort of "catch up" to the higher costs. There is another raise coming at the 1st of next year as well, so it seems they are making up for quite a bit.

Answer 2

well, the things are going to be more expensive, they increased the minimum wage because inflation is raising, and if they don't increase the wage, much people won't have enough money to buy the more and more expensive things, and bills

Answer 3

You see it the repugs way -hence the wrong way..

That applies to increased wages in any aspect.
so lets not raise wages for anyone the next ten years period....
and see where that puts you and the rest of the 'The way I see its'

Answer 4

You can't even live off minimum wage anymore. It has to benefit tons of people, especially if they are trying to support their family.