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Example: Restaurants including fast food ones, pay out about one third of gross income for wages. Lets say for simple figures they take in $1,000 per day. They would allocate $330 per day for wages. If you doubled wages to $15 an hour, they would have to increase prices to bring in $1,333,000 per day to stay even. This raise would cause a lot less customers to go to the restaurant. Business would fall off, gross income would decline, and the restaurant would have to lay off people.
This would be happening all over for the under $30,000 workers. Big gain in unemployment.
You made a huge error.
You didn't include the effect of those people who doubled their wages. They will spend their increase on more products and services. Net effect on unemployment in the economy would be zero. The only thing that will happen is that the low earners will experience a real increase in wages while everyone else will experience a real decrease.
You are in Iceland with what are probably cradle to grave government benefits. In the United States the minimum wage is currently below the poverty line. By raising the minimum wage in the US companies are probably getting a better employee because they now don't have to work a third job to make ends meet.
Raising minimum wage does not make poor people less poor. All it does it drive prices up and the poor are right back where they started, still poor.
Meanwhile, the middle class now have less money because they didn't get a wage increase.
You didn't include the effect of those people who doubled their wages. They will spend their increase on more products and services. Net effect on unemployment in the economy would be zero. The only thing that will happen is that the low earners will experience a real increase in wages while everyone else will experience a real decrease.
They will not spend their increase on more products and services because of the increase in prices.
At the very low end where many people can do the work, higher pay could result in higher productivity. That's basically what a lot of places like Inn-N-Out or Costco are doing. They're paying higher wages. What they get is employees who stick with the jobs. They do it because it does raise productivity. Could they pay $8.75 instead of $12/hr? Sure. Inn-N-Out employees bust balls though. You ever seen the guy going at those potatoes? That's kind of fun to watch. I've never seen a McDonald's worker hustle that way.
I think what you say here in not entirely accurate. I would argue that the reason they have more productive workers is the higher wage attracts better employees to apply for those jobs and allows them to be more selective in the higher process.
McDonald's basically has to take what they can get; pretty much those that are not capable, qualified, or motivated to do anything else.
If all of those places started paying the same as Costco and In-N-Out, then they would have to pay more than everyone else to continue to get those quality employees.
Again, that is a bad example. The guy at In-N-Out is productive because the company can be picky about who they hire because they are paying higher than normal wages for the industry.
If the MW was $12/hr this would no longer be the case, and those companies would need to pay $16/hr to have the same effect.
No disagreements. Thing is your argument is a tangent that's not at all related.
I don't think increasing the minimum wage will increase productivity. But increasing wages at a company will allow them to select better candidates, which would lead to higher productivity.
One argument I hear in favor of higher minimum wages is that they increase productivity at the workplace. While I am a minimum wage worker I am not so sure about this. I do believe that higher wages probably increase willingness to work for longer to make more money, but working longer is not the same as working better.
This just sounds like a cheap excuse to demand pay raises, honestly. Do you believe a higher wage increases productivity at the workplace? Explain your case whatever your standing.
I've never heard anyone say that higher wages increase productivity. Wages usually increase as a result of increased productivity. Unless the people at the top decide to skim for themselves the increase in profit that worker increased productivity creates. Increased wages are a result of increased productivity, not visa versa.
Don't be silly. Prices won't go up nearly as much as the wages do. That would only happen if *everyone* got the raise.
Am I being silly? When I started working in high school, minimum wage was $4.25 an hour. People that tried to live off of that wage were still poor. It was increased to $4.75 an hour and then to $5.25 if I remember right. At that time, I was working as an assistant manager at a restaurant. Less than a month after each of those increases, we increase our prices. Some items as much as fifty cents. I also remember seeing prices increase in the grocery store.
So after that increase, people making $5.25 were still poor and had no more disposable income than they did before.
Now it is what, $7.25? People trying to live off of that are still just as poor as they ever were.
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