Effects of Minimum Wage

I started to put this in Great Debates but I really don’t feel like debating it as much as just hearing other peoples views or logic on the subject.

My logic tells me that there are a number of very important factors involved that will do more to hurt the ones that it is intended to help. I suspected this when minimum wage talks became active again. My first and most important thought is that if the wages go up to a full living wage it will become more attractive to a larger number of people. The employers will have a larger pool to select from and will tend to select the creme of the crop, leaving a part of society that struggles for jobs even in a worse situation.
My second thought is that it will put some places out of business costing more jobs and it will also raise the prices of food for those who are already struggling.

It would set off a round of inflation, at the end of which, the poor would be exactly where they are now.

It doesn’t change anybody’s bargaining power, relative to the rest of the players in the economy. Those who could only get minimum wage, will still only be getting minimum wage. Those who can command a thousand times minimum wage, will still be able to get a thousand times minimum wage.

If you deliberately devalue the dollar in the labor market, it will not retain its value in the food market, or the housing market, or the healthcare market.

An hour’s labor will buy me a meal at a family restaurant. No matter where the minimum wage is set, the value of my labor, relative to the value of my dinner, will not change. You have simply changed the yardstick from English to metric.

Raising the minimum wage gives you the illusion of compassion. Out on the street, it doesn’t change anything.

The jury is still out on this in Seattle…

Seattle passed a $15 minimum wage law in 2014. Here’s how it’s turned out so far

Studies of the effects of the Seattle wage hike have had different findings: A 2017 University of Washington study found that while wages went up, hours worked declined, resulting in less pay for low-wage workers. But in a follow-up published last year, the authors noted that this wasn’t the case for everyone, and experienced workers in low-wage jobs saw their earnings rise.

Another from researchers at the University of California, Berkeley released in 2018 found that the wage hikes increased pay and have not led to job losses.

Laboratories of Democracy: what Seattle learned from having the highest minimum wage in the nation

Those who were already working more hours before the wage increase saw “essentially all of the earnings increases,” while the workers who had fewer hours saw their hours go down, but wages go up enough so that their overall earnings didn’t really change. They theorized that a slowdown in new hiring for low-wage jobs could explain their earlier findings that overall payroll had gone down.

Not exactly, because a rising tide doesn’t lift all boats - just the ones that were already sitting on the waterline. This means that prices will not inflate such that things are exactly the same for the poor - that means that (after a delay, and presuming that market forces operate naturally) prices will rise to a degree roughly proportionate to the average increase in wages for the populace the product is targeted towards. And since a good chunk of the population will have seen little or no increase, the resulting inflation will be dampened, such that things will indeed be a little better for the persons who saw an increase in their wage, and a little worse for everyone else.

Because of the lag in the minimum wage against inflation in many states, by your argument there should be deflation in food prices. Seem that way to you?
How much of a price of a meal is in labor? How much of the price of a grocery cart?
Why do you think prices that involve a lot more than labor will rise in lockstep with labor rates?
In fact, since restaurants and groceries have a lot of fixed costs, more potential customers through higher wages and thus more spending money will make them more profitable.
There will be price increases, but people like me who never were close to minimum wage will pay most of them, which is fine with me for less income inequality.

If only we had any experience with minimum wage increases.

This is key, and really quite obvious. We’ve raised the MW many times before, without these gloom and doom predictions. There’s probably a level at which it could really be too high and cause serious problems, but that’s never happened so far.

This becomes difficult to pin down. See two adults sharing a place vs one adult with twelve kids. Keep in mind that you can still receive SNAP while making over $25/h. So it’s not clear how high you’re talking.
We’ve tried small increases, so we at least know something about those. We have less direct evidence about larger increases.

My biggest concern was not inflation as much as it is less desirable employees for a variety of reasons will be going into competition with much more desirable employees and they will come out on the short end of the stick more often than not. This could have pretty serious negative effects.

This didn’t happen before for the many increases. Why would it happen now?

Puts people out of the domestic workforce. Leads to reliance on illegal and overseas labor. Makes some voters feel better for being generous,

Cite that this happened after the many prior increases?

Why? Do you feel people are currently choosing not to work? How are these people paying their bills?

It’s not like a rise in the minimum wage is going to suddenly attract people who have voluntarily chosen to leave the workforce - and have the financial means to do so - back into these jobs.

I am very much in favor of raising minimum wage as necessary, I just don’t favor it being a living wage. I also favor some industries having higher minimum wages than others.

Some have mentioned that other minimum wage increases have not caused a more desirable influx of workers into that market. That is true because it has never been raised to a living wage before. Kids in school, young mothers looking for part time work but mainly people who have issues that have kept them out of the main stream job market are the ones I fear for. At a living wage minimum wage jobs would now be mainstream.

What events in our history lead you to this conclusion?

Well since we don’t have a control Earth to compare to you have to rely on inference.

If your business goes under because you had to pay people a living wage, you should go out of business!

What kind of an argument is it that cries, but I should be able to pay poverty wages because it’s good for me!

It’s mine owners bitching, if we have to pay full wages to adults, instead of underpaying children, all our mines will have to close! We’ll be out of business! Mining will disappear!

Those mines should have been closed, they didn’t go out of business and mining did NOT disappear.

This is a bad, old recycled argument that didn’t hold water then, and doesn’t now.

This statement is meaningless unless you tell us what you think a living wage is.

Yeah no shit; that article lists four different ones for the US, and the MIT calculator ranges from $8.50 to $36. And as I mentioned, you can still make more than that and qualify for SNAP.

So posts without actual figures are meaningless.