Why you'd come to a place as ill-informed as VGC for a topic as nuanced as minimum wage is beyond me. These people couldn't even predict Splatoon's sales, why would you trust us collectively to educate you on a topic highly debated between professional economists?

The real answer is that you're going to get a partisan answer no matter where you go; in my opinion a federal minimum of $15 is foolish because you can't blanket 7% of the world's land mass or 5% of the world's population with one requirement that sits above the federal poverty line. The federal minimum SHOULD end up around $10.50-11 simply to adjust to the rise in cost of living that has not been truly accounted for in about 40 years, and from there the states should work to further adjust it correctly. Not that that'll happen, because we're too intent on leaving people in office who have tried 50 times to repeal Obamacare solely to make a statement (even when these congressmen don't even believe that Obamacare should be repealed anymore).

The correct outcome to a higher minimum wage, even something as high as $15, would be to correctly increase wages for higher-level workers too, and this would normally not result in a huge economic downturn; it's only a recent occurrence that we've had concepts such as career CEOs who destroy companies long-term while collecting WAY too much money in salary and bonuses short-term, and where we've had this overwhelming money-now-money-first mentality to our businesses where paying aby employees outside of the very top level adequately is a sin.

But again, don't listen to me: I'm posting on VGC, that means I probably shouldn't be trusted on the subject. These are also just opinions, because the correct outcome to minimum wage increases died when we started letting corporations run our country. Now we have to increase and hope big business doesn't decide to gimp the economy or further move overseas.

If you increase minimum wage, you increase overhead. If you increase overhead, you increase costs.

If you increase minimum wage, you increase consumer capitalization. If you increase customer capitalization, you increase revenue.

Unless one business is paying every single worker, they benefit from the increased capitalization of all customers.

The inflation fallacy is based on the false premise that only costs will increase to businesses (by ignoring increased capitalization of customers).

^ this.

A few things:

1. You are only thinking of the dichotomy of large businesses, with high profit margins versus. consumers. Small businesses which can't afford massive increases in the cost of labor will go out of business outright. This is especially true if they are in a perfectly competitive market, and are consequently price-takers.

2. I have never seen the argument that it will increase capitalization among the poor. In fact, the opposite argument (it will increase aggregate demand) is given. for why we should have higher minimum wage laws But if this were always true, why not indefinitely increase the minimum wage? Most people are not going to invest their new wages into capital. They are going to go buy video games, televisions, and new cell phones with a sizable minority who are currently not meeting their basic needs using that money on those needs. Think about the people who make minimum wage. They aren't future business owners who will accumulate capital, with the exception of the sizable portion of students making minimum wage. But they have supplementary income from other sources (financial aid or parents.) 

3. There is very little evidence that aggregate demand will increase. While it is clear that average wages will increase, it is also clear that a percentage of the populaton will become unemployeable. That percentage will likely counter-balance any gains in the group who get higher wages. The last empirical statistic I had read was something like a 10% increase in minimum wages leads to a 1% increase in unemployment on average in cities and states that have instituted such policies. These tend to be places with high average wages already (like San Fransisco and LA.) Imagine the effects in places like the mid-west or south where the cost of living is much less, and overall the population is less productive, but they can use cheaper labor to theier advantage. More than anything else, it seems to me as if it will centralize capital to large cities, and only increase demand in large cities.

These are very good discussion points and further proof of the fact that policymakers fail to have constructive dialogues. I'll address your concerns and clarify, point-by-point:

1. I am lookign at all businesses in this way: any business that offers a service will be subjects to consumers' price sensitivity. If more consumers are more capitalized, this should increase the consumer base that finds the services offered to not trigger said sensitivities. By extension, this should also increase the willingness of current customers to increase their consumption. Take a diner that has lost business to McDonald's lower price model, for example: they should see a migration of customers to them that no longer fidn their prices to be prohibitive. Additionally, McDonald's should see their consumer base eat even more of their garbage lol. There will always be the business that has no potential for growth (for many reasons), and their prerogative should be to find a way to become competitive. 

2. To clarify my verbatim, I'm talking about pure capitalization and being empowered with the ability to purchase goods and services. Inclusive of the poor, Americans are generally debtors and not averse to outspeding their income. As such, we should expect anyone making more money to spend more money: call us conditioned, but it's what we do. With greater capitalization, there comes the greater ability to pay off debts and, consequently, build credit, obtain loans, invest, etc. The propagative effects of that are significant, as I am sure you are well aware. Similarly, higher wages mean greater tax responsibilities and decreased welfare needs: there are additional propagative effects, as well. 

3. Regional sensitivities are a huge issue that are often overlooked, especially with regards to taxation. The minimum wage is directly related to that, even though the same mechanics apply. The ever-present counter to "cost of living is so cheap there" is "they pay you shit there." Realistically speaking, unless there is a very specific logistical reason for reduced costs (local center of production), labor costs should be uniform. If an energy company doesn't have the demand to make the revenue to justify the labor expenditures, they shouldn't be producing so much there. The increases in unemployment would only make sense, if the employers are trying to maintain margins with the current revenue model. If a significant portion of your community is now more capitalized, your revenue model should account for this. Ultimately, bad businesses (vinyl record or film development stores, for example) will probably just fail faster. As far as migration of workers is concerned, it might make sense to expect the opposite: if you can't make a livable wage in suburbia, it makes sense to seek employment in the city. If the wages are competitive, there's no reason to leave there, especially since living costs will most likely be lower.

My intention is not to oversimplify the issue: that's for the politicians to do and lie about, but there is a lot of context that never gets addressed in these conversations. Most especially, you never really hear about how the DoL usually reports inflation at half of the actual rate and how companies often use 3% as the benchmark for a cost-of-living increase (which is always less than DoL inflation). Since healthy economies thrive on consumption, it makes sense to find ways to capitalize more people and have them consume. Overemphasis on profit margins is the reason the wage, tax rate, and income inequality conversations have all become so relevant: if money pools up in one place, the economy stagnates.

That may be close to the median of all incomes, but I'm sure it's a LOT less than the average of professional (degree requiring) jobs. Take out the minimum wage and non-certified jobs and I bet teaching comes out on the lower end.

Teachers work, often, in the 50-65 hour per week range, a lot more than 40, and we get paid for roughly 33-35 hours of that time that we do work, and the other stuff we essentially don't get paid for. We don't get summers "off" in the sense that we are paid. If we are paid during the summer, it is because we are voluntarily (or being forced by the district) to sacrifice money we get from our paychecks in order to spread it out over 12 months. Many teachers can't afford to take the summer off despite working far more hours and in a far more stressful environment than many jobs so they can't even take a break.

Tenure is something you get after years of working. I'm a 1st-2nd year teacher, still years away from getting tenure. All tenure does, by the way, is make it so someone can't be fired for no reason. If I get bad test scores, I could still be fired with tenure. Prior to tenure, I could be let go randomly for no reason.

Most teachers I know/work with have their masters, specialists, or Phd, and I work in a pretty undesirable environment (low income/high crime school and area). I graduated in 2013 and plan on starting my Masters in the next year or two. Teachers in other countries ARE paid the same amount as doctors and are VALUED in other countries. That's how it used to be in this country.

I pay 14.5% of my paycheck towards retirement. Teachers have some of the highest retirement payments of any job. I won't deny we have good benefits (at least, if your by yourself for sure), but the retirement payment hurts. Thankfully it doesn't go into social security where politicians get to waste the money on ridiculous things and we don't have to worry about the Baby Boomer crisis impacting our retirement age, but it's still a lot of money per paycheck.

1. The issue is that in the short term the diner doesn't have the extra funds to employ all of their workers at the drastically higher rate. Let's say the diner is currently making revenue of $150,000 per year. $50,000 of that goes to the owner (this is what makes it worth it for the owner to run the business, otherwise they would work for somebody else.)

The rest is to be divided among capital costs: the taxes on the building, repairs to the building, food, and then to labor costs: a cook, two waitresses (assume the state requires minimum wage payments and the diner has no tips), a hostess, and a dishwasher. The cook makes $20,000 per year, the waitresses $14,000 per year each, the dishwasher $10,000 per year. That leaves $42,000 to costs of capital. Let's assume that the $42,000 is enough to maintain the building, buy food, etc for a year (it's a small diner.) Now let's say there is a 30% minimum wage increase for the following year, and capital costs are constant. That would mean ($20,000 + $28,000 + $10,000)*.3 = $17,400 is the increase. That also means the owner will have to take a pay cut of the same amount, only making $32,400. Knowing the stress of running a business would it be reasonable for the owner to keep running the business for $32,400 or could they use their skills elsewhere? What if the owner wasn't making a profit before the minimum wage hike? What if they were just  getting by on $30,000?  What if the owner employed many people? Would it not make more sense to just lay people off? What would happen to the quality of the service? How exactly would this affect demand for this small business owner if he or she lived in a low populated area? 

But heck, we don't really have to speculate. Small business owners have already recognized this reality when they had to shut down their business after wage hikes. 

Here is one example, but one can find plenty of other similar stories. 

http://www.cbsnews.com/news/feeling-burned-by-a-15-minimum-wage/

"I hadn't done the math. I penciled it out and said, 'Oh my god, that's a lot of money,'" he recalled. "'I know other stores haven't done [the math]. You try to get through the day -- you aren't thinking three years ahead."

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2. Again, this is no different from the aggregate demand hypothesis. You are using an accounting term "capitalization" to describe what is essentially the economic concept of the effects of an increase in aggregate demand. Unfortunately, there is very little evidence, besides a single study in the 90's, when the labor market was at its peak in health, to show that minimum wage increases lead to increases in aggregate demand. I also don't buy that taxes will decrease. Governments, being the way they are, would just use the tax money on other pet projects. Furthermore, in places like Seattle there were actually people asking workers to reduce their hours so that they could remain on welfare, and also use more leisure time. 

http://usherald.com/after-getting-15-minimum-wage-seattle-employees-now-want-less-hours-so-they-can-stay-on-welfare/

“Astoundingly” those who advocated for the increase in Seattle are now asking their employers for fewer hours so they can keep their welfare benefits."

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3. There are many factors besides labor costs which contribute to a cheaper cost of living. In the U.S: southern and rural mid-western states have lower costs of living because small population densities => lower housing prices, closer proximity to energy sources like coal and oil  as well as agricultural sources => lower transportation and food costs, and fewer regulations overall increasing the cost of production. None of these have anything to do with labor costs. It is unrealistic to believe that labor costs should or would be uniform, especially in a federalist system with varying legal frameworks, as well as an overall diverse population of 315 million people. People in different regions have varying levels of productivity, and therefore the amount of money they can make for an employer varies. If wage levels were the same across the board, all this would do is push employers to places where productivity is higher, limiting the ability for persons who live in non-productive regions. The effect of this is that those with the fewest resources are stripped of any advantage they have left, and are either forced to migrate to already over-populated cities or remain in their economically stagnant position.

And I already illustrated that the increase in unemployment is an economic fact. It is one of the first things you learn in a microeconomics course. 

It is also supported quite a bit empirically. 

http://www.columbia.edu/~jm3364/Minimum_Wage_and_Space.pdf

Often, minimum wage laws are decided at the state or regional level, and even when not, federal level increases are only binding in certain states. This has been used in previous literature to evaluate the effects of minimum wages on earnings and employment levels. This paper introduces a spatial equilibrium model to think about the seemingly conflicting findings of this previous literature. The model shows that the introduction of minimum wages can lead to an increase or a decrease in population depending on the local labor demand elasticity and on how unemployment benefits are financed. The paper provides empirical evidence consistent with the model. On average, increases in minimum wages lead to increases in average wages and decreases in employment. The low-skilled local labor demand elasticity is estimated to be above 1, which in the model is a necessary condition for the migration responses found in the data. Low-skilled workers, who are presumably the target of the policy, tend to leave or avoid moving to the regions that increase minimum wages. 

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As another thing to note. We even have predatory organizations trying to take advantage of minimum wage hikes by exempting themselves. In Californian cities, labor unions have been trying to force membership by becoming exceptions in minimum wage legislation specific so that their employees don't have to work at the minimum $15/hour, and consequently business are more likely to higher them. It is quite abhorent really, especially coming from an organization that is suppose to work for higher wages. 

http://www.cnbc.com/2015/07/30/la-union-wants-to-be-exempt-from-15-minimum-wage.html

"In May, the Los Angeles City Council voted to lift the minimum wage to $15 an hour by 2020. As the council reconvenes this week after a summer recess, the group is expected to take action on a union-backed clause in the wage bill that would exempt unionized workers."

Well yeah, because other professional (degree requiring) jobs produce more and have greater costs to get there. Doctors and lawyers have various insurances they must pay into, and go to school for 8-10 years. The same is true for college educators, research scientists, etc. Engineers and programmers make a lot of money from their employment, and have an advantage of being in short supply, while teaching is not so much an under supplied position (as a generalization, certain subjects, such as STEM need a lot more teachers.) As with anything else, wages are subjected to the laws of supply and demand. If there is a lot of demand which the supply can't meet, then employers are going to entice people with higher salaries. If two people can fill every one position, the salaries will drop. 

The average hours teachers work are comparable to other professional jobs, hovering between 45-55 hours per week (think of how much a doctor is on call or the amount of work an engineer/programmer does at home, teachers aren't the only ones who work off-hours.) One must also consider that the teachers working the higher number of hours are the ones who are older and are consequently paid more. New teachers have fewer responsibilities because they are starting out and are not involved in so many extra activities. (Source for this at end of page.) 

I don't see the relevance of your summer comment. For other occupations people must work summers and that is included in the final salary that you look at for being so much higher. Having said that, most teachers do get summer positions elsewhere and can make money on top of their already above-median salary. What is so horrible about that? 

All of my high school teachers except for two had bachelors only in the subject they were teaching. The ones who had higher degrees were paid more (a Biology teacher with a masters in Biology, and an English teacher  working on her doctorate.) Doctors in other countries don't have so many hoops to go through nor as high insurance costs like this one, and teachers in other countries are MUCH more qualified. This is clear enough by the results. Apples to oranges. 

Tenure is something not many other jobs have, regardless. You know you'll always have a job regardless of external factors. 

http://teaching.monster.com/careers/articles/4039-when-where-and-how-much-do-us-teachers-work

 Teachers aged 50 and older who were employed full time worked more hours per week than teachers who were younger- 6.7 more hours than teachers in their thirties and 5.1 more hours than teachers in their twenties

Average working hours per week

Ages 20-29: 37 hours per week

Ages 30-39: 36 hours per week

Ages 40-49: 40 hours per week

Ages 50-59: 42 hours per week

I found this statistic especially interesting since all of the schools where I have worked the veteran teachers seemed to be out the door at the end of the day while the new teachers where still perfecting their bulletin boards and planning lessons. Maybe it’s because those veteran teachers were choosing to do their work at home (see below.)

1. There is the same factor overlooked here: increased consumption, due to increased customer capitalization. If that same business was making $150,000/year and they saw a 30% increase each year, they would see an annual increase of $45,000. That would translate to an annual profit increase of $27,600. In that case the owner goes from making $50,000/year to $77,600/year. If the business was a diner, there's a fairly good chance that a sizable portion of their clientele earns minimum wage, so the increase would benefit their customers and, by extension, them.

2. You highlight a few issues here: A) A study already endorsed the economic benefits of increased minimum wages, but I think one study is too limited a sample size to realy on, B) Until the government focuses on fiscal responsibility, we should not expect increased tax revenue to lead to decreased taxation (but we should demand it), and C) If people are asking for fewer hours at the new wages to maintain benefits (from the goverment), employers will have to hire more workers (thereby increasing the number of consumers and their capitalization), which should lead to increased business revenues and decreased employment.

3. This is pretty cool and a big issue for any economic analysis: regional cost of living. It's perfectly sensible that demand for regional labor leads to increased costs for said demand, but the actual wage rate for certain labor (in theory) should be constant. If pizza men make $15/hr, then that's the pizza man standard. If a region has all the pizza men they need, the labor force shifts to the new needs or relocates to where they need pizza men. I wouldn't advocate for such an oversimplified approach to minimum wage, becuase it's haphazard and ignores the many factors you brought to light. Given that inflation has vastly outstripped the minimum wage, I think there needs to be a comprehensive evaluation of regional labor markets to ensure that workers are sufficiently capitalized to consume goods, need less government assistance, and contribute to the tax pool (I have ideas on how everyone should have a responsibility, but that's a different conversation). Without a normalization of some kind, more people will contribue less and require more. The study you linked was very interesting, and it makes me wonder how much of the effects can be attributed to nature of the American economic environment from 1985-2015 (Supply side amazingness!). There also seems to be a signficant ampunt of controversy surrounding minimum wage studies, and you'll probably appreciate this: http://journalistsresource.org/studies/economics/inequality/the-effects-of-raising-the-minimum-wage

Your note encapsulates a big factor in this discussion: dickheads ruin capitalism, every damn time. If profit margin driven (to the point of being caustic) policies didn't lead to the abuse of labor markets, we wouldn't be dealing with wage issues post mortem. Then, you have people abusing the government to take advantage of policies that are intended to correct the policies that were endorsed by the people whom they oppose. The problem is not insoluble, but people always trying to get a leg up (at the expense of others) are the problem and the exacerbators of the problem. I guess the old saying is axiomatic: "Capitalism is inherently insane."

PS: thanks for the info and constructive conversation; it's a real treat on the inernet lol.

Increasing minimum wage means the fat cats at the top will charge more for goods and services. It's one reason why California went to shit, and why Californians are fleeing to Texas.

What NEEDS to happen is property tax needs to go down across the board, and regulations need to be imposed on apartment complexes so that they can't overcharge (over a dollar a month per square foot is ridiculous, I don't care where it is).

Another thing is these people need to stop assuming they can raise a family flipping burgers at McDonald's. That's a high schooler job.