How will the middle class get hurt by raising the minimum wage to $7.25?

Question

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Answer 1

It probably won't get hurt directly, but there will be a few inconveniences:

- lower income on stocks and businesses that they own
- increased cost of living
- increased welfare for those left below the min.wage, which means more taxes or less spending on other government programs.

Answer 2

Let's examine what happens when you raise minimum wage on a small scale. Let's say you have a store that sells various household goods and you have 10 employees. You pay them all minimum wage. Now the government comes along (to help, naturally) and forces you to give them all a raise, by raising minimum wage. You've just had your cost of doing business increased fairly dramatically. How are you going to handle this increase in cost? Are you going to fire somebody and make the rest of your staff handle their workload? (Getting fired hurts the middle class.) Are you going to raise prices to cover the cost? (Increased prices hurts the middle class.) Are you going to just suck it up and take it out of your stores profits? If you do that, you won't be able to expand and open that 2nd store you had planned accross town. That store would have employed 10 more people, and if you don't open it, 10 people that would have been employed before the increase in minimum wage are now not going to be employed. (Being unemployed hurts the middle class.) This is a very simple example. Please check out the souce I've listed for a wealth of knowlege that will empower you to spot a dishonest politician or an ignorant ecconomics professor within minutes of them opening their mouths.

Answer 3

Only people who consume a lot of low wage labor will actually notice the difference. (childcare, cleaning and gardening services). Only 7 million workers earn the minimum wage and they will get an extra $4000 a year which will transfer of about 28 billion dollars out of 12 trillion dollar economy to low wage workers or .25%. Compare this with the effect on the middle class of the top point one percent (110,000 people) who increased their income share by more than 3% of GDP ($360 billion) over the last 20 years.

Answer 4

When the government raises the minimum wage, it has no effect on the middle class.

*Minimum wage set by the gov't is actually an indicator of how the economy is doing and not a way for the gov't to tell employers that they need to pay people more.

*The truth of the matter is that by the time they increase the minimum wage not that many people are making below that limit. The gov't, in essence, sets the wage price floor below equilibrium.

*Now, if the gov't were to raise the minimum wage to something like $20/hr, the middle class would probably be affected.

Answer 5

Middle class will not get hurt much except that the incremental minimjum wage will push up inflation a little unless efficiency increases at least proportinately with the rise in the minimum wage,
Think of this as middle class's help to the economically weaker.

Answer 6

The salary isn't the priority. US 'entitlement application' regulations prefer somebody staying domicile vs taking a $12 an hour interest area-time. This bill would purely harm the middl-type, and the financial device. We usher in a million migrant workers + relatives to %. flowers. Many make over $15,000 a 300 and sixty 5 days, yet we've tens of millions of people on unemployment. WHY ??? Oh, they think of they are too reliable to %. flowers. and ...... unemployment will pay very just about the comparable. so why artwork?

Answer 7

Simple the small business onwer will pass the increase of the costs to the midddle class, and the poorest of workers will be laidoff, and shut of a oppounity to prove they are productive members of the workforce. The companies will cut off the workers that are least productive first and those tend to be people with than 10th grade education. The goverment should not set the wage floor for workers, and its probadly better to use cash transfers or tax credits to get them above the poverty level actually.

Answer 8

I'm not sure how big the impact would be, but raising the minimum wage has been proven to be directly proportional to an increase in inflation if its not coupled with equivalant productivity improvements (which it usually is not). Basically its used as a political tactic by democrats to get people to vote for them who don't understand economics.

Answer 9

The way I understand it, we have to remember the small businessman/woman. They, too, are trying to live on what their business makes after paying salaries and paying for whatever stock they need to keep their business. So, they discover quite quickly that they can't make ends meet cuz they are paying the same people who were there yesterday more money per week. So they have to lay off some people and probably work more hours themselves. This means their kids are in daycare longer per day and could influence their growing up years. Just a thought.

Answer 10

The effect will be felt because the majority of small business owners are generally members of the middle to upper-middle class. It may affect those small business owners because they usually are either breaking-even or just above that level. An increase will affect their whole business operations and the ripple effect will spread to outwards from the business to the home