### Author:  [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)
#### Post date: [February 17, 2013, 9:10pm UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/101 "2013-02-17T21:10:32Z")
> [@BigT](#):
>
> …most businesses would be sociopaths who care about one thing–making profits. That’s why we have to regulate them, the same way we have to regulate amoral individuals. Left to themselves, businesses would destroy the country if it meant they made more money.
>
> We have to make businesses have true personal responsibility.
Oh. You’re right. I completely forgot that.
I’ll have to tell my sociopath mother, who runs her own counseling business.
And my brother, who started his own architectural firm. I’ll tell them that if it wasn’t for the MW and regulation their sociopathic behavior would destroy the country.
And the lives of the 20 or so people they employ.
Thanks for reminding me.
\.
---
### Author:  [@DigitalC](https://boards.straightdope.com/u/DigitalC)
#### Post date: [February 18, 2013, 1:10am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/102 "2013-02-18T01:10:55Z")
> [@Shodan](#):
>
> No, they have as many on the payroll as they can afford
You don’t hire the people you can afford, you hire the people you need.
---
### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [February 18, 2013, 1:35am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/103 "2013-02-18T01:35:06Z")
> [@DigitalC](#):
>
> You don’t hire the people you can afford, you hire the people you need.
One does? And how does one pay these people whom one can’t afford to hire?
---
### Author:  [@NormalDude](https://boards.straightdope.com/u/NormalDude)
#### Post date: [February 18, 2013, 1:45am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/104 "2013-02-18T01:45:38Z")
I am not going to take any official position on whether or not the minimum wage should be increased to $9 per hour. But I wonder and will ask what affects might cascade from such an increase?
At $9/hr per worker, costs increase for the business. Prices will rise. People making a little more than the minimum wage - let’s just say in the $10 - $13 dollar range, will feel like crap because in effect _they_ in their minds have just moved “down” and closer to minimum wage. If they are represented by a union, they will DEMAND to receive raises and will likely get them.
This phenomenon is likely to increase up the pay scales, albeit at a diminishing intensity. In the end, the average pay will increase for a good chunk of pay scales below the median. Not only will costs go up for companies and cause prices to rise, but more people will feel they have more to spend (temporarily) and though this can stimulate the economy, I suspect that this can and will cause inflation - perhaps runaway inflation which can become devastating to our economy. It’s a push-pull and one thing will lead to the other and before you know it, the wage increases will be cancelled out by cost increases. Back to square one only worse if we get runaway inflation. Not sure of what the best solution is.
---
### Author:  [@Lobohan](https://boards.straightdope.com/u/Lobohan)
#### Post date: [February 18, 2013, 1:50am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/105 "2013-02-18T01:50:34Z")
> [@John\_Mace](#):
>
> One does? And how does one pay these people whom one can’t afford to hire?
Doesn’t a business typically hire people that provide net income?
---
### Author:  [@NormalDude](https://boards.straightdope.com/u/NormalDude)
#### Post date: [February 18, 2013, 1:51am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/106 "2013-02-18T01:51:31Z")
> [@panaccione](#):
>
> Ok then I think we can agree it should be raised to at least $9?
My prediction: Obama set the high end of the target. Dems & GOP will fight it out and it will rise to $8.25, IMO.
---
### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [February 18, 2013, 2:28am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/107 "2013-02-18T02:28:28Z")
> [@Lobohan](#):
>
> Doesn’t a business typically hire people that provide net income?
Yes, but they don’t typically “provide net income” on day one. And I don’t know how that relates to hiring people the business can’t afford. How does one pay these people?
Please don’t tell me you take out a loan, because if you can take out a loan to pay people, then you can afford to hire them. Just like I can afford to buy my house, even though I have a mortgage on it.
> [@NormalDude](#):
>
> My prediction: Obama set the high end of the target. Dems & GOP will fight it out and it will rise to $8.25, IMO.
Maybe. But I think the $9 is to be phased in over a few years, so it’s not like he’s asking for $9 MW effective tomorrow.
---
### Author:  [@panaccione](https://boards.straightdope.com/u/panaccione)
#### Post date: [February 18, 2013, 4:47am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/108 "2013-02-18T04:47:07Z")
You know, I’m starting to see that this is a very complicated issue and that simply raising the min. wage does not imply that things are going to get any better. Some people insist that prices will rise, employees will get cut, and the whole thing will just be a wash. Others say what about those who make around $11-12, how is that fair to them?
Furthermore, given the political climate we live in today, many if not most of the major retailers, chain restaurants, and other businesses that employ the min. wage worker are going to take it very personal and show how much they disagree with this. I wouldn’t be suprised if they did in fact cut employees and/or their hours and benefits, raise the prices to make up for the loss. I highly doubt that they’ll let the loss come from them and their shareholders.
Honestly, I think the solution here is clear. We need social programs that address these problems directly. We need food assistance, housing assistance, access to affordable health care, environmental protection, and emphasis placed on developing education and practical skills. These types of things that don’t have to be as closely tied to profit, and can afford to take a loss in the short-term, if it’s clear that their will be a gain in the long-term. Something which is not going to happen with a business.
It’s just priorities.
---
### Author:  [@magellan01](https://boards.straightdope.com/u/magellan01)
#### Post date: [February 18, 2013, 5:41am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/109 "2013-02-18T05:41:25Z")
Question for all those arguing that raising the minimum age to $9.00 is a good idea: why not raise it to $12.00? $15.00? $20.00? Seems like all the reasons would be just as well. Even more so. No?
---
### Author:  [@Lobohan](https://boards.straightdope.com/u/Lobohan)
#### Post date: [February 18, 2013, 6:05am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/110 "2013-02-18T06:05:10Z")
> [@John\_Mace](#):
>
> Yes, but they don’t typically “provide net income” on day one. And I don’t know how that relates to hiring people the business can’t afford. How does one pay these people?
It’s directly related to “hiring people businesses can’t afford”. If workers generate net income, then you can afford one as long as you can use them to generate income.
If you’re not selling widgets now, hiring more people is a waste. If you’re selling every widget you can make, hiring more people is a good idea.
The affordability is based on how much income the worker will generate, right?
So this business of not affording people is silly.
---
### Author:  [@NormalDude](https://boards.straightdope.com/u/NormalDude)
#### Post date: [February 18, 2013, 6:11am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/111 "2013-02-18T06:11:25Z")
> [@magellan01](#):
>
> Question for all those arguing that raising the minimum age to $9.00 is a good idea: why not raise it to $12.00? $15.00? $20.00? Seems like all the reasons would be just as well. Even more so. No?
No.
Ever hear of inflation?
If you ever lived during a time of hyper-inflation you would not advocate a $20 minimum wage. That is if you didn’t have a stroke coping with such a nightmare.
---
### Author:  [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)
#### Post date: [February 18, 2013, 10:45am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/112 "2013-02-18T10:45:29Z")
> [@NormalDude](#):
>
> No.
> Ever hear of inflation?
> If you ever lived during a time of hyper-inflation you would not advocate a $20 minimum wage. That is if you didn’t have a stroke coping with such a nightmare.
I’ve heard of inflation, but I’m not sure I really understand it.
I thought Magellan01’s idea was actually a good one. But I’d like to learn more about why it isn’t.
Could you please educate me? Could you please tell me about inflation? I would like to learn more so that I can make good decisions.
Thank you.
---
### Author:  [@Lightnin](https://boards.straightdope.com/u/Lightnin)
#### Post date: [February 18, 2013, 2:15pm UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/113 "2013-02-18T14:15:41Z")
> [@magellan01](#):
>
> Question for all those arguing that raising the minimum age to $9.00 is a good idea: why not raise it to $12.00? $15.00? $20.00? Seems like all the reasons would be just as well. Even more so. No?
[Prior to 2007, minimum wage didn’t keep up with inflation](http://oregonstate.edu/instruct/anth484/minwage.jpg). Workers were working just as hard, if not harder, but were making less and less money. Raising minimum wage to $9/hour simply keeps up with inflation.
Why would going over that be a good idea?
---
### Author:  [@magellan01](https://boards.straightdope.com/u/magellan01)
#### Post date: [February 18, 2013, 2:51pm UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/114 "2013-02-18T14:51:49Z")
> [@Lightnin](#):
>
> [Prior to 2007, minimum wage didn’t keep up with inflation](http://oregonstate.edu/instruct/anth484/minwage.jpg). Workers were working just as hard, if not harder, but were making less and less money. Raising minimum wage to $9/hour simply keeps up with inflation.
>
> Why would going over that be a good idea?
Why would it be a bad idea? My question goes to the necessity of a minimum wage at all. Not that I don’t think there are some minor benefits. But other than the inflation reasoning, which makes sense if you accept that there was some correct magical number before the proposed correction for inflation, the other reasons offered in this thread are as valid for a $20 minimum wage as a $7, $8, or $12 one.
---
### Author:  [@Lightnin](https://boards.straightdope.com/u/Lightnin)
#### Post date: [February 18, 2013, 3:32pm UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/115 "2013-02-18T15:32:54Z")
> [@magellan01](#):
>
> Why would it be a bad idea? My question goes to the necessity of a minimum wage at all. Not that I don’t think there are some minor benefits. But other than the inflation reasoning, which makes sense if you accept that there was some correct magical number before the proposed correction for inflation, the other reasons offered in this thread are as valid for a $20 minimum wage as a $7, $8, or $12 one.
As I pointed out, the “magic number” is where it keeps up with inflation- because otherwise, workers will effectively be making less and less. Care to share your reasoning for why MW should go higher than that, or is this just _reductio ad absurdum_?
---
### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [February 18, 2013, 3:35pm UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/116 "2013-02-18T15:35:47Z")
> [@Lobohan](#):
>
> It’s directly related to “hiring people businesses can’t afford”. If workers generate net income, then you can afford one as long as you can use them to generate income.
How do you pay them their first paycheck if the income isn’t generated until after their paycheck is due? Give them an IOU?
---
### Author:  [@magellan01](https://boards.straightdope.com/u/magellan01)
#### Post date: [February 18, 2013, 3:40pm UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/117 "2013-02-18T15:40:13Z")
> [@Lightnin](#):
>
> As I pointed out, the “magic number” is where it keeps up with inflation- because otherwise, workers will effectively be making less and less. Care to share your reasoning for why MW should go higher than that, or is this just _reductio ad absurdum_?
Where what keeps up with inflation. Let’s say the MW is set at X and inflation is at Y%. Well, it’s easy to argue that the MW should move from X to X + XY. My question has to do with what constitutes X. In other words, if there were no MW right now, and you were going to recommend one, what would it be and why?
---
### Author:  [@BrokenBriton](https://boards.straightdope.com/u/BrokenBriton)
#### Post date: [February 18, 2013, 3:58pm UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/118 "2013-02-18T15:58:31Z")
This has to be good for business and employers; teaches companies to value every employee as well as to organise efficiently. Offers workers personal dignity and something approaching a decent standard of life.
UK experience after 10-years of National Minimum Wager (NMW):
> [@](#):
>
> This paper provides a retrospective summary of the effects of the UK national minimum wage (NMW) on labour market performance since its introduction in 1999. We use an ‘incremental differences-in-differences’ (IDiD) estimator to look at the effects of the NMW in each year through its differential impact across local labour markets. We find that the NMW is associated with a significant fall in wage inequality in the bottom half of the distribution. This suggests that geographical areas where the NMW ‘bites’ more have experienced larger declines in wage inequality than elsewhere. While the overall effect of the NMW on employment rates averaged over its existence is neutral, we do find small positive employment effects from 2003 onwards. Likewise, the association of the NMW with unemployment has been negative in recent years. NMW effects on hours have been mixed, but overall there is no compelling evidence to indicate that the NMW upratings have had an adverse effect on full-time total hours of work. Notwithstanding the clarity of these results, any causal interpretation of them might be compromised by the presence of concomitant policies that might have been correlated with the ‘bite’ of the NMW.
full pdf:
[http://onlinelibrary.wiley.com/doi/10.1111/j.1475-5890.2010.00123.x/abstract](http://onlinelibrary.wiley.com/doi/10.1111/j.1475-5890.2010.00123.x/abstract)
IIRC, the idea here was not to set NMW too high as the experience from France suggested (at the time) that acts as a deterrent to youth employment - something like 2/3 of male average seemed about right, I believe.
---
### Author:  [@SweetiePotato](https://boards.straightdope.com/u/SweetiePotato)
#### Post date: [February 18, 2013, 5:44pm UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/119 "2013-02-18T17:44:31Z")
A couple points from a non-economist:
1. I worked for min wage a while back, for a large company. They were making millions in profits every year, and having lavish company parties, the CEO was installing gold leaf on his walls (this is true) and the only reason I and my 100-or-so min-wage coworkers were making MW was because the company had decided to take advantage of the economy. They knew they were only getting college-educated 20-somethings to work for MW because the job market wasn’t so good. And that 20-somethings who need to pay rent would rather work in an office making MW than at Burger King making MW. Not every company is hiring MW employees because they can’t afford to pay a higher wage. Many companies will simply pay as low as they can for as long as they can until something changes, maybe a MW hike, or maybe an economic boom.
2. My dad owns a small company and only hires Union workers. Union workers are much more expensive-- you have to pay pensions, fringe benefits, union-wages (which are much higher). If businesses were, as some of you are arguing, simply out to make as much money as possible, no one, my Dad included, would hire Union workers. So the argument that companies will always hire the cheapest possible employee over all others is not accurate, either.
---
### Author:  [@Lightnin](https://boards.straightdope.com/u/Lightnin)
#### Post date: [February 18, 2013, 6:07pm UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/120 "2013-02-18T18:07:19Z")
> [@magellan01](#):
>
> Where what keeps up with inflation. Let’s say the MW is set at X and inflation is at Y%. Well, it’s easy to argue that the MW should move from X to X + XY. My question has to do with what constitutes X. In other words, if there were no MW right now, and you were going to recommend one, what would it be and why?
Beats me. Although I must admit that your question seems kind of irrelevant- after all, we \*do \*have a minimum wage. Not increasing it results in a net loss for those who make minimum wage. It’s just a shame that employers aren’t adjusting for inflation, ain’t it? If they were, we wouldn’t be having this discussion.
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