Quote (RiskOfFire @ Mar 17 2015 11:42am)
And then there is reality...
Raising the minimum wage increases the amount of money that the lower and lower middle to middle class have. If the minimum wage increases to $15 an hour anyone making up to $30 an hour is likely going to see a near immediate raise.
What will actually happen to the economy is that there will be tens of millions of people with hundreds of millions and billions of dollars to spend. That is called demand. What are businesses and corporations going to need to do to get that money back? Hire tons of people to produce goods and services to sell to meet this new demand. Of course, the wealthiest will suffer because they will have less wealth as more of it will be in the hands of the lower classes.
Although the economic expansion would make the whole world wealthier eventually, evil disgusting scumbags like camponizi don't care about anything whatsoever beyond immediate profit margins because free market capitalists are deeply and internally flawed and evil, no different from islamist extremists, nazis, any group that's brainwashed themselves into abandoning logic, reason, and morality.
It's a lot more complicated than that.
Raising the minimum wage increases the cost of hiring unskilled labor.
Companies can respond by switching to higher skilled labor to compensate. This is in part what you're trying to say by implying higher wage earners also win. That's to this extent true, but at the direct expense of low income workers.
Companies can also respond by reducing their demand for labor. The decrease in labor consumption represents rent lost to the economy. This is offset in part by the increase in wages among those employed, but demand isn't necessarily created (in net, remember that artificial floors create inefficiency loss), it's just some very roundabout redistribution.
Companies can then either raise prices or take a loss on profit, likely a mixture of both. A fall in profit reduces the firm's competitiveness, with profit below normal profit low wage firms will struggle to attract investment and weaker players may leave the market. This will balance out over time as the remaining players consolidate and raise prices.
Consider also that the customers paying for the price hikes are mostly poor, middle, and working class. Walmart doesn't cater to the rich, neither do fast food joints. Minimum wage increases are thereby a tax on the lower and middle class for a small segment of the lower middle class.
When you add in that a large contingent of minimum wage workers are not actually from impoverished households (most are not primary income earners) raising the minimum wage starts to look like a fringe issue that tries to achieve a pretty modest gain in a very inefficient way.