phaedruss on 01 July 2014
| catofellow said: I do not believe it possible to predict the impact of a raise in the minimum wage. Here are the direct impacts Bad - Some businesses will close down rather than pay increased wages - Some businesses will increase prices or reduce production to offset the rise in labor costs - Some services currently offered will be eliminated (classic example, shoe shiner) - Some workers above the minimum wage will experience a decrease in wages or slower pay increases - There will an increase in black market labor activity (pay "under the table", illegal immigrants, etc.) - Some employees will lose their job Good - Workers at the minimum wage will get raises - Workers earning the higher minimum wage will increase consumption - Workers earning the higher minimum wage will become more productive - Service will improve in industries will minimum wage earners - The children of minimum wage earners will be healthier and perform better academically - Some workers may enter the labor market that otherwise wouldn't There is no legitimate economic study I am aware of that can quantify these impacts. If raising the minimum wage is a bad idea, luckily inflation will fix it over time. It is not really a hot button issue for me. |
How will inflation fix it over time? It will just necessitate another minimum wage increase if anything.
