If the Minimum wage goes up to $10 an hour, what happens to people now making $10.01 to $11.00 an hour? (fast food, Obama)

[I'm Retired Now]

Lost in the discussion about the potential raise in the minimum wage is what impact that will have on people who CURRENTLY make slightly more than the new minimum wage when it is implemented.

Here is what I am talking about:

Current Minimum Wage $7.25 an hour is paid to mostly people with no skills and in retail or fast food.

Semi Skilled person working in a position such as an Office Clerk, Nurses Aide, Receptionist, Cook, factory worker with some skills, etc. (Lets say they currently make $10.25 an hour)

They are paid more than minimum wage because these semi skilled employees have some unique education and talents and the marketplace says they should make more than minimum wage.

OK now, lets say President Obama is successful and get a law passed that will increase the Minimum Wage to $10.00 an hour and now low skilled fast food workers make $10 an hour.

What happens to the semi skilled workers who use to make $3 more than Minimum Wage because they had talents and education? Will their pay go up to $13 an hour?

[urbanlife78]

That is between them and their employer, but their pay would not be affected.

[North Beach Person]

Originally Posted by urbanlife78

That is between them and their employer, but their pay would not be affected.

You're correct. New hires would be getting the same wage as longer term, presumably better trained, employees.

Take the next step now.

[Rggr]

Over time their pay would go up too and $10 would just become the new unlivable wage.

[pch1013]

Originally Posted by North Beach Person

You're correct. New hires would be getting the same wage as longer term, presumably better trained, employees.

Take the next step now.

Well, what happened the last time the minimum wage was raised (in 2009)? And the time before that? Did it result in an inflationary spiral, as you seem to be suggesting?

[urbanlife78]

Originally Posted by pch1013

Well, what happened the last time the minimum wage was raised (in 2009)? And the time before that? Did it result in an inflationary spiral, as you seem to be suggesting?

I have yet to see an economy collapse due to a minimum wage increase.

[renault]

Raising the minimum wage would only put small family-run businesses (the ones that employ people locally and keep towns running) out of business, while Big Box stores like Walmart could easily absorb a pay hike. They would also reap the added benefit of no longer having to compete with local family businesses, so then they could monopolize the town and pay their workers less by making them all part-time. Do we really want that to happen?

The Inequality Problem

If you think the problem is "income inequality," then the natural response is to increase incomes at the bottom, by raising the minimum wage.

But raising the minimum wage may not be an effective way to help those least well-off. Joseph J. Sabia of San Diego State University and Richard V. Burkhauser of Cornell looked at the effects of increases in the minimum wage between 2003 and 2007. Consistent with some other studies, they find no evidence that such raises had any effect on the poverty rates.

That’s because raises in the minimum wage are not targeted at the right people. Only 11 percent of the workers affected by such an increase come from poor households. Nearly two-thirds of such workers are the second or third earners living in households at twice the poverty line or above.

The primary problem for the poor is not that they are getting paid too little for the hours they work. It is that they are not working full time or at all. Raising the minimum wage is popular politics; it is not effective policy.

[pch1013]

Originally Posted by renault

Raising the minimum wage would only put small family-run businesses (the ones that employ people locally and keep towns running) out of business, while Big Box stores like Walmart could easily absorb a pay hike.

Which doesn't explain why the big-box conglomerates are fighting it so fiercely.

And what about the customers of those locally-owned small businesses? Some of them would be getting raises, making them better able to keep their money local instead of sending it to Bentonville.

It works both ways.

[freemkt]

Originally Posted by renault

Raising the minimum wage would only put small family-run businesses (the ones that employ people locally and keep towns running) out of business, while Big Box stores like Walmart could easily absorb a pay hike. They would also reap the added benefit of no longer having to compete with local family businesses, so then they could monopolize the town and pay their workers less by making them all part-time. Do we really want that to happen?

The Inequality Problem

If you think the problem is "income inequality," then the natural response is to increase incomes at the bottom, by raising the minimum wage.

But raising the minimum wage may not be an effective way to help those least well-off. Joseph J. Sabia of San Diego State University and Richard V. Burkhauser of Cornell looked at the effects of increases in the minimum wage between 2003 and 2007. Consistent with some other studies, they find no evidence that such raises had any effect on the poverty rates.

That’s because raises in the minimum wage are not targeted at the right people. Only 11 percent of the workers affected by such an increase come from poor households. Nearly two-thirds of such workers are the second or third earners living in households at twice the poverty line or above.

The primary problem for the poor is not that they are getting paid too little for the hours they work. It is that they are not working full time or at all. Raising the minimum wage is popular politics; it is not effective policy.

??? The natural response is NOT to raise the minimum wage - that is the response of people with one-sided thinking. MY response is to reduce the cost of living for thoose who earn minimum wage.

Sigh.

[freemkt]

I've had jobs making slightly above minimum wage, and have NEVER gotten a raise when minimum wage went up,