Minimum wage question...Doesn't raising it ultimately just cause the prices of everthing to go up?

Question

Never quite understood the benefit, unless it is meant to be very short term

I guess I would assume business owenrs would preserve their own income by raising prices over time to mitigate this increase

Answer 1

Not by as much as you might think. The cost of labor as a price component has been steadily dropping since the 1950's.

Most businesses are going to absorb those costs rather than passing them on, since they are already charging as much as people will pay. Groceries will get a little more expensive, but that was happening as a result of higher energy prices anyway. The pirce of a Bic Mac might go up a nickel. too.

The may be some job loss, but only temporarily. More money at the bottom of the food chain means more jobs all around.

What people don't understand about low minimum wages is that they are a government subsidy for businesses. The minimum wage was supposed to be a training wage. Instead, it became the base wage for entire industries. When you pay workers less than it costs to live, the taxpayers end up making up the difference in the form of food stamps, medical care and Social Services. All of which end up costing more than just making companies pay a decent wage to begin with.

Answer 2

I would have to say no, but in some cases that could be true.

In my area the starting pay for most, if not all, jobs are well above the minimum wage. The reason for this in my area is that there are more jobs than people. It's very hard for business owners to get and keep help, so they pay above average wages.

There are a lot of factors to consider about minimum wage. Inflation causes prices to rise over time. If the minimum wage didn't force employers to increase wages from time to time, several things could happen. Some employees that are living from paycheck to paycheck can't afford to change jobs, and in some cases there are no jobs to find.

The minimum wage also establishes wages for skilled labor jobs. For example; if the average skilled labor job pays $15.00 an hour and they raise the minimum wage $2.00 to offset the rising cost of living, then it would stand to reason that at some point, not usually right away, the skilled worker would want a raise of $2.00 an hour and eventually the marketplace would level out with those jobs paying $15-$17 an hour. Each time the minimum wage rises, pay rates are reevaluated.

Answer 3

Raising the minimum wage will cause some prices to rise over time, simply because the cost of producing certain goods/services may rise due to higher labor costs.

The effect, however, is not nearly as huge as some claim, simply because a great deal of workers are already paid more than the stated minimum.

Raising the minimum wage is an attempt to help low-end workers earn enough to minimize their needs for social assistance programs.

Answer 4

the place is the better call for? there's no longer one. no longer something is changing in terms of grant and demand. the only substitute is the corporate could could pay extra in hard artwork costs if the minimum salary have been raised. You of course have not got a sparkling information of economics -- or a thank you to run a company. very few employers can discover the money for to easily enhance each laborers wages around the board. So if club Fed is obtainable in stressful $10.00 an hour for minimum salary, all of the together as thrusting their chests out and asserting "it extremely is for the employees," many employers will could the two (a) shrink the style of hours their workers are working, which leads to not extra earnings for the employees, (b) lay off some workers, which potential unemployment is going up, or (c) close their doorways altogether, which makes unemployment flow way up. As for bigger companies like, say, Wal-Mart, they could enhance everybody's wages to $10.00 an hour. the subject is that hit in Wal-Mart's back pocket ought to be paid for someplace. Who will ultimately finally end up procuring it? purchasers, contained in this way of better costs. awaken and smell the fact. you're in no way going to have a equipment the place super government forces businesses to do issues interior the call of equality and fairness the place the purchasers (additionally ordinarily conventional as American taxpayers) do no longer finally end up bearing the brunt of it. The extra liberals attempt to push the equality and fairness themes devoid of addressing the subject of what the employees carry to the table, the extra super agencies are going to outsource to different international places the place workers will do a much extra suited interest for much less funds and be grateful to have a job.

Answer 5

Some services that rely on minimum wage will go up, but how many people earn minimum wage anyway. Not that many, and in theory, these people will have more money to spend and then will further stimulate the economy. It is really a living wage question, as most people earning minimum wage will still not be able to afford health insurance, more expensive gas and higher food costs.

Answer 6

It does but the price of everything goes up anyway, its just a way of making sure that everyone gets enough money, or it was when they first brought it in, the way things are going you will need to be earning at least 50K a year before you can even start to live properly.