Obama proposes to raise the minimum wage to $9 per hour. However, I think that is completely counter-productive as this will lead to more unemployment and inflated prices. Employers will need to make more money in order to compensate for the increased minimum wage and will also have to unemploy a few of their workers. Unemployment is already an issue and we should be looking to cure this problem by opening more jobs. Raising the minimum wage will do exactly the opposite. Minimum wage jobs are not supposed to be jobs off of which can live off of, but entry level jobs for beginning employees. There is no way we can make minimum wage jobs provide a living wage without seriously crippling the economy due to unemployment and price inflation. However, if the minimum wage is lowered, then employees will be able to hire more employees, helping the unemployment problem. It is true that $6 per hour is a low salary and is not something one can live off of, but the jobs that offer minimum wage were never supposed to be jobs for one to make a living out of. Therefore, instead of raising the minimum wage, should it be lowered to $6 per hour?
The research does not support your view.
(Bolding mine.) http://www.cepr.net/documents/publications/min-wage-2013-02.pdf (PDF warning.)
And 18 states have minimum wage requirements more than the current federal requirement, with Washington State having the highest @ $9.19/hour (above Obama’s proposal right now). Lots of minimum wage jobs are going unfilled in Washington and the state’s economy isn’t hurting as much as other states with lower minimum wages.
I think any business that has employees on public assistance should be fined equal to the amount their employees get in public assistance. Same for medical care if they don’t offer insurance that their employees can afford.
I am sick and tired of these business sucking at the taxpayers teat. They need to start paying their share.
So $9 is probably still too low.
How can you simultaneously understand that $6/hour is not a living wage and not see how fucking stupid this is?
Every time we look at raising the minimum wage, there is a circus parade of sobbing “small business owners” and “businessmen” claiming it will be The End Of The World.
And each time it somehow manages to NOT be the end of the world.
Something something about a kid and a wolf, or something like that.
I agree with this.
You don’t fix an unemployment problem by getting people jobs they can’t live off of. Unemployment is not an issue because people need something to do during the day. Unemployment is an issue because people have to pay for housing, food, clothing, etc. If the jobs you create don’t solve THAT need, you haven’t solved the unemployment problem.
I’ll also point out that if you lower wages 20%, companies aren’t automatically going to pay for 20% more workers, they’ll just pay 20% less in wages.
I’m not enamored with raising the minimum wage, it’s not exactly historically low, or even particularly low compare to the last 30 years. I’d say it should be reset every 5 years or so. So, after next year it would 5 years at $7.25, maybe go up to $8 or $8.25, that’s about 3% per year.
If $9/hour is good, why stop there? Wouldn’t $20/hour be so much better?
Could you tell us what effect that would have on the unemployment rate?
Why should insurance be tied to your job? That’s one of the things we need to change in the US, not entrench even further.
As I’ve said in many threads about the MW: If we, as a society, want to provide a social safety net to people, should not we, as a society through our taxes, provide that safety net? Why is it that employers and only employers must provide that safety net?
If you make it significantly more expensive to hire people, you are going to get fewer people working, and you will put more people sucking on said teat.
n.b.: I would not advocate lowering the MW to $6. We have a MW, and it would be politically impossible to lower it. Not to mention the social chaos it would cause unless we also increased welfare payments. If we were starting from scratch, I’d say no MW. But as it is, we have one, and our whole system is structured around it. Too much at stake to jerk it around recklessly.
Unemployment is not the problem. McDonalds, Walmart, Target, Burger King, etc… etc… etc… are always hiring. The problem is income inequality.
This idea would make it worse.
Some friendly advice: Now that you are on record as saying that at this time, don’t run for president! 
Yes, you have John. No, employers should not be soley responsible.
However, they do operate in this country so they are apart of this society. Their employees do depend on them to a certain degree for their livelihood. They also depend on the middle class to be customers.
But, they actively try to dismantle our government, pay as little in taxes as possible, and are generally unreasonable and uncooperative. See, Republican Party. Does that not imply some responsibility on their part?
Lol. There’s a lot more in my past that’s going to stop me from that.
Do you seriously not understand what a minimum wage is?
Because most people aren’t as stupid as this question pre-supposes.
I think you have a rather strange view of “corporations”, rather akin to the way that believers in woo talk about “chemicals.”
Strictly speaking any incorporated company is a “corporation”, from the smallest 1 person company to huge ones like Exxon-Mobil. Broadly speaking, their goal is to make money, but they(obviously) don’t go about it the same way.
Paying as little in taxes as possible is hardly unique to corporations. I try and pay as little as I possibly can, while staying within the law. Why? Because it’s my money, not the government’s, and I want to keep as much for me and mine as I can.
Being “unreasonable” and “uncooperative” is very subjective. If your goal is to make money, then legislation to pay your workers $1.75/hr is something that will hit your bottom line hard if you have a lot of minimum or near-minimum workers. That’s why they fight it.
Think about it this way- would you take a pay-cut of $1.75/hour without fighting it? To a company, that’s what this amounts to, except that it’s that $1.75/hour for every single minimum wage person, plus whatever booster raises people making under the $9 proposed minimum would cost. For a single worker, that comes out to $3640/yr (at 40 hours per week). That’s not chump change, and unless your workforce is already paid well above minimum, something that will have ramifications well beyond payroll.
I would be in favor of a minimum wage if slavery was still legal. As all employment arrangements are now voluntary, a minimum wage is unnecessary. Minimum wages have the effect of making illegal mutually beneficial contracts that do not harm anyone else. That’s all that needs to be said on the issue.
That pre-supposes that power is distributed equally between employer and employee, and that all people have the capacity to earn a living wage in the economy of the time. Since neither of these are true, it can hardly be said that ‘all employement arrangements are voluntary’.
Let’s look at a burger joint. Computing the impact of a minimum wage increase requires you to know the labor content of each product, and the average number of products sold per hour. Say a burger is $5.00, the labor content pre-minimum wage increase is $1.00 (probably high) which are the total wages for all employees divided by the number of products. Certainly most of the cost is from raw materials, management salaries, building rental. utilities, and margin.
Say you increase the minimum wage by 20%. That increases labor costs by 20 cents, making the cost of the product $5.20. So a 20% increase in pay is only a 4% increase in product cost. Since all stores have the same increase, the is not competitive loss, but possibly a loss in sales if the demand for these things is quite elastic. Even someone buying 5 a week will only pay $1 more, nothing compared to the bills expected from his inevitable coronary.
This could be a problem for the people making the least money - but these are the people with the most benefit from the wage increase. Those with more money won’t see a direct benefit, but the cost increase is relatively minor for them.
But they probably do see an indirect benefit. Those with higher wages will consume more, which increases sales and thus employment. That must be enough to counter the “obvious” decrease in unemployment you claim, given the study cited.
Not to mention that a higher minimum wage makes investments in productivity pay off faster, and that is where our wealth really comes from.
If eating food is good for your health, wouldn’t eating 10,000 calories a day be even better?
Need answer fast by the way.
Be specific, please: What precisely will the impact of a $9 minimum wage be on prices? How much exactly will they inflate? How worried should I be?