Quote (bogie160 @ 17 Mar 2015 21:02)
Do rich people shop at Walmart?
Do rich people eat fast food?
Who do you think consumes the most minimum wage produced goods and services?
Does this concern you?
middle income earners of course, the great consumers.
do you think low income and poverty level human beings can afford Walmart and Mcdonalds? please check your privilege sir.
look at the dollar store and the salvation army store, and Aldis and food wharehouse people living on low income can't afford to eat fast food what are you thinking?
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Quote (bogie160 @ 17 Mar 2015 18:13)
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.
One thing I think you should look at this in fairness is the value that you are placing on labor as it factors into the entire gross profit margins that a company sets, I know margins are wildly different depending on the type of business and we can be speaking about a variety of business when we discuss the minimum wage. When you talk about manufacturing labor really won't have a very big voice by the time items hit retail and if a couple points increase in labor is all it takes to send a company south then it's in constant danger as is. As we all know the Commodities will have a direct affect on the price of the raw materials used in manufacturing and those are on a constant rollercoaster ride. Any good company will have cushion in it's gpm for these hitches. And the slow steady rise of the minimum wage is what I would be talking about not some crazy all or nothing doubling of it. Fast Food has crazy high margins and can easily squeak out higher wages.