a reply to: xuenchen
The effects of a minimum wage boost are extremely complicated. Boosting the minimum wage is truly one of the stupidest things any government can do
for that reason. I'm not sure why you would do something when the actual effects cannot be measured. They are taking an action and will have no idea
what the effects of what they are doing are. Why would someone do something when the effects are too complicated to measure? Stupid.
Here are things that CAN happen:
1. Business decide instead of passing their costs to consumers as is standard practice, they will instead run as a charity and maintain their same
prices while paying their employees a higher wage. Unlikely scenario. Probably never happened.
2. All the businesses effected are not well run and don't account very well. The minimum wage goes up and simply keeps doing everything the same
except pay their employees more money. Their profits go down. They now have less money to invest. Black market opportunists now evaluate whether to
pay less than minimum wage. Smart investors now look at the industries effected most as less attractive because there is less money to be made. The
risk-return scenario is now worse, making it more attractive to invest in skilled labor enterprises where profit margins are unchanged instead of
unskilled labor enterprises where profit margins are now reduced.
3. Prices of products at the companies go up to maintain the same level of profit. This has the ultimate effect of transferring some money to the
white collar class to some people in the blue collar class. But entirely broke people will be totally screwed because their income is still zero and
now their bills just went up. Who will end up ahead? Depends on your luck! I guess Democrats believe in lotto-based help for the poor. If your lucky,
1) you have a minimum wage job, 2) you won't lose your job and 3) you'll get a higher wage.
4. Wages across the board go up much more than expected because if $15 is the minimum wage that is paid to people with zero credentials and zero
experience, then $20 or more will be paid to people with a lot of experience. This dramatically boosts prices but everyone ends up ahead. Everyone
employed gets one level higher tax bracket, so its effectively a tax increase. While prices are up, as a percentage they are not up as high as the
min. wage boost so people with blue collar jobs are better off. The people who are on retirement incomes are screwed because they are not making
anything more but their costs are higher... if wages are 25% higher its absolutely obvious prices are going to go up at least some... while profits
can go down, average net profit margins over time are perhaps 7% or 8% across all business. Therefore there is no option for businesses to simply make
less money. They'd be out of business if they did not raise prices under this scenario.
5. Rather than businesses having to worry about prices, they focus on productivity. They seek to hire highly experienced employees with strong work
abilities. If you look weak, sickly, or really young, then don't bother applying. The company needs to boost productivity 25% which they attempt to
do by hiring only prime productivity employees. Unemployment stays the same but youth unemployment and senior citizen unemployment rises. People with
weaker abilities now need all kinds of government support. This will have to be patched up with more government welfare since those who have no jobs
now need a ton of government welfare.
Even under the very best scenario, you have to become a slightly communist country and say: You know that labor contract you own? Well I own it too
now and I'm going to tell you what you have to do with it or I'll destroy you. I'm sorry but that is not civilized. If we have to raise the level
of civilization by lowering it, then we have accomplished nothing and set the bar lower for the future. Its regression. Violence is not a good
solution to lopsided contracts. Socialists will kill people if necessary or at least destroy their lives on a whim so THEY can have roads and THEIR
children can have schools... then they call you greedy for opposing their thefts.
If you say "this is my private contract with a friend in private" the socialist will say, "no the contract must look like this with "$15 per
hour" written here. I'll fine you and if you don't pay the fine I'll take your business property from you. If you try to go onto the business
again I'll have you taken to jail for as long as you keep going there." Therefore, the socialist is ultimately entirely destroy the life of someone
who insists they one their own contracts in private and will not pay the fine and will keep going to the business they rightfully owned.
Even if people are helped on balance by the dirty crimes of socialists, they have set up a class of people can commit crimes as a way of life named
"politicians" and set up society to fail badly down the road.