Effects of minimum wage increase?

[I85]

I was wondering what effects everyone thinks the minimum wage increase will have, if any.

I was thinking that the increased wages will increase costs for businesses, in turn increasing the final cost of many goods/services. Many of these goods/services are used by lower/middle income families(large % of renters). (fast food/groceries/dollar store/babysitter/etc)

By the time you look at the net increase in wages vs the increase in cost of living, will your renter have more money or less money? Will vacancies increase or decrease, or do you feel it will have little effect? Will the increased costs to businesses result in an even greater unemployment #? If yes, will the vacancy increases be enough to lower rents as well?

From a commercial(non-residentail)standpoint -do you see the extra pressure, that may be put on small businesses, causing more of your tenants to look for rent decreases, umbrellas on repairs, etc?

I haven't found much talking about any effects the increase may have and am curious to see what everyone's input is.

 

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[marktech101]

I don't know a lot about this subject, but I'm guessing that the majority of companies that pay their workers minimum wage are the big ones such as Wal-Mart, fast food joints, etc. They will probably increase prices slightly, but their CEOs may also see wage cuts as they won't be able to sell their goods as well with the increased prices.

 

[hakrjak]

Just a few years ago I could get a value meal at burger king for $5 bucks large sized with everything. Now the same meal costs me around $8. That's the direct impact of a minimum wage increase right there. The cost of goods & services rise, and it does absolutely no good to help the people it's targeted at.

- Hakrjak

 

[callmelucid]

lets give a hypothetical yet likely example of how this will affect this scenario.

given that minimum wage was $8 but is now $9 and company x is a large warehouse chain that hires 1000 people (to make numbers simple). also assume that when the wage was $8, people worked 40 hours a week.

so $8*40=$320/week (at that moment in time without considering the cost of living as examples above show also go up). this means that the employer is paying $320,000 a week in labor expenses.

now, the price/hour of an employee HAS to be $9 (remember a free market is a mutual exchange between both parties. in this case one or maybe even both of the parties wouldnt agree or freely go for this... philosophically the government takes away your freedom by MAKING you do something you wouldn't otherwise want to freely do... but thats another discussion). so $9*40=$360/week. thats $40 a week extra. lets just say at the time its enough for a tank of gas in a mid sized economy car.

so when each employee/40hrs = $360 a week, that means labor now costs $360,000 instead of $320,000. businesses now have to come up with an extra $40,000 a week on top of their current taxes and other expenses. some might say "well that is fine, they are 'rich" so they can afford it". well, if one knew anything about economics they would know that the consumer always pays for government regulation.

lets see why:

that $40,000/$320 (a working salary per week) = 125. This means that if a business cant afford that increase in expenses, they will have to cut 125 peoples jobs just so other people can get an extra $1 an hour or the equivalent of a tank of gas a week. let's just say you are the "lucky" one who wasn't fired and now make a little more money. now you have to pay extra money for homeless and unemployment benefits. that means your taxes will go up. you will also have to work harder to make up those labor hours. in essence, you are working even harder so you can pay more taxes (less net profit) and victims who are out of work now get your money for free without working.

is this fair? HELL NO!

i know liberals and some republicans have good intentions but this is really soooo (pardon the harshness) stupid. they are severely hurting those whom they try to protect. makes no sense at all.

 

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[hatterasguy]

When minimum wage goes up the people who get paid it, get less hours. More so in this economy when companies are watching every dollar go out.

It doesn't really benifit anyone, they really should just peg it to inflation so you still get cost of living increases.

 

[bflbob]

If the minimum wage goes up 10%, then the poverty level goes up 10% too.

It is like trying to help get people who have below average intelligence.

No matter how smart (or rich) you make people, half of them will always be dumber (or poorer) than the rest.

 

[hatterasguy]

On the flip side you don't want to do away with it, or you will have people working for $2 an hour.

 

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[callmelucid]

On the flip side you don't want to do away with it, or you will have people working for $2 an hour.

but if they are willing to work for $2 an hour and the price of living drops, then what would be wrong with that? i mean anyone can clean toilets/work fastfood. why say those who do that are equal to any other job? let the market decide.

if every fastfood place paid $2/hr then no one would work there if it was really that bad and employers would have to raise wages to get employees. it balances out

dont underestimate the power of the free market

 

[hatterasguy]

Price of living wouldn't drop. In some areas of the country you can live for $8 an hour. Where I live you couldn't afford to rent a cheap apartment on that, never mind food and living expenses.

Than these people become wards of the state, living on Section 8 and making us pay for it.

Their is no simple solution.

Research the industrial revolution if you want to see the market set working standards.

 

[callmelucid]

Price of living wouldn't drop.

why not?

 

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[china]

I think most of the posters here are too young to remember "price caps" too. That means there is a maximum price you can get for your whatever.

There is no easy solution though I do believe part of the problem is that companies pay top executives too much. There is nothing wrong with a CEO getting a million dollars. The problem is that CEOs get a ZILLION dollars while they pay the worker bees very little.

 

[andviv]

I don't like topics like this... it becomes a political discussion rather quickly...

 

[Yankees338]

Because the bulk of consumer spending is done by people who make less than average salaries (not per capita, but in aggregate). So, if minimum wage dropped, consumer spending would drop, GDP would drop, and unemployment would rise. When unemployment rises, benefit payments increase, and that's made up either in tax hikes or budget deficits.

Choose your poison...

I thought there was some statistic (not sure of the exact #s) that states that the richest 10% of America make up 80% of consumer spending? Maybe not...?

How often are men/women that support a family really working minimum wage jobs? I think it's mostly high school and college kids, or just people looking to make a little extra dough.

Additionally, minimum wage at a federal level is very...unfair? I don't know the exact word that I mean, but it doesn't really make sense to me. If minimum wage is decided at $9/hour on the federal level, that is a very subjective amount based upon the region of the country. In the midwest, that it would equate to a far greater standard of living than it would in NYC or San Francisco.

 

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