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You wrote: > if everything costs more Then you wrote: > many businesses simply respond by upping the price Which should be "some" businesses for "some" prod

• exclusiv 9y ago
  Oh yes I see now. I shouldn't have written everything as I mentioned that foregoing profit is an option too. Thanks for clarifying. > in a competitive market the salary increases would not be passed on to the consumer but would come from the profit of the business owners I still don't agree here. Very few people run a business to break even and it's hard to make even 10% net after taxes these days. The huge profits you see for public companies do not translate to the bulk of employers. If a business owner can pass it on to the customer by raising the prices or adding a surcharge they will. As an example, I've seen health care surcharges for waiters on San Fran restaurant bills before. If they can't pass the added cost onto the consumer and they have low margins, it's unattractive to keep the business running with all the headaches and liability. Or they'll outsource in response or possibly cut hours of hourly employees and demand more from salaried. Or move to another state or country. I do think a min wage hike of a reasonable amount will do no harm and will improve a lot of people's lives. The levels we are currently talking about probably won't affect most businesses or economies and that the opposition is probably overblown. I support Seattle's move. But I think it's silly to suggest that you can hike it to whatever you want and the theories from economists will align and the consumer won't pay more; that it just comes from profits and that won't affect anything. It's not as simple as "everything will be fine, businesses will just take it from profits". And it's not as simple as "it seems to work in Seattle; we know exactly how it will play out even though we're doing it during a boom and only have a few studies to go off".
  • sedachv 9y ago
    > But I think it's silly to suggest that you can hike it to whatever you want and the theories from economists will align and the consumer won't pay more; that it just comes from profits and that won't affect anything. Well neither me nor the economists suggest that. For a given money supply, a marginal increase in minimum wage will act as wealth redistribution as long as there are profits to redistribute. On average a single worker can only do a fixed amount of workW, so a business that needs a minimum amount of work Z done to be viable needs to employ at least N = Z / W people. At some point on the increasing wage scale the profits run out and you cannot employ the minimum number of workers and the business is forced to close. At that point the only alternative is to increase the money supply, which is where inflation and general price increases will come from. Note that the wealth redistribution is aggregate: the minimum wage increases are intended to redistribute wealth to the lower-middle class. There will be less jobs (I am surprised there was not more job loss found in these studies), but the total amount of money going to minimum-wage employees will increase. Businesses that rely on exploiting workers to be viable should go bankrupt. Suppressing wages to prop up otherwise unviable businesses is a slippery slope that ends up at "well, at least we feed the slaves."
    • exclusiv 9y ago
      Ok I think that's fair and we're actually in alignment. Thanks for the well thought out response.