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The number one cost for businesses are employees, often by far. If you raise that year over year, it’s bound to be painful. Say 60% of my business expenses wer

The number one cost for businesses are employees, often by far. If you raise that year over year, it’s bound to be painful. Say 60% of my business expenses were employees, 10% was rent and 30% was produce for a restaurant. A doubling of the minimum wage would likely increase by expenses by 35% - assuming the minimum wage didn’t impact where my food was purchased. This is why there a large fields of economic theory that warn against minimum wage hikes. The increase in minimum wage is going to mean those whose rent out buildings will increase prices. Food becomes more expensive, shops have to close, etc. it’s essentially a race to the bottom and as it’s a zero sum game it’ll often lead to the economy to slow (long term). This is as there is a shift in purchasing behavior, or people moving due to employment loss.

greedo 7y ago
And it's also important to remember that if the min wage rises, it often affects all pay structures at a business. If the entry level position gets a big pay jump, then other employees will expect a corresponding bump in their hourly rate. Otherwise you'll end up with new hires making more than employees with experience.
pytester 7y ago
>A doubling of the minimum wage would likely increase by expenses by 35% - assuming the minimum wage didn’t impact where my food was purchased. This is why there a large fields of economic theory that warn against minimum wage hikes. Right. Because it's savage towards profit margins they tell you that they'll be forced to lay people off to scare you... even when they won't do any such thing.
mcny 7y ago
I don't believe that a business would keep an employee around for a minute more than it has to. I have zero sympathy towards "job creators" because they wouldn't hire people if they could avoid it. Rent is expensive just like college is expensive because we have artificially limited supply and made home ownership desirable. We talked about trickle down and look how the speculation has turned out. Higher minimum wages will lead to inflation and lower employment but it is worth it imo. We are externalizing the costs from employers which makes no sense. If someone is working full time, they shouldn't need public assistance for housing or food.

greedo 7y ago

And it's also important to remember that if the min wage rises, it often affects all pay structures at a business. If the entry level position gets a big pay jump, then other employees will expect a corresponding bump in their hourly rate. Otherwise you'll end up with new hires making more than employees with experience.

pytester 7y ago

>A doubling of the minimum wage would likely increase by expenses by 35% - assuming the minimum wage didn’t impact where my food was purchased. This is why there a large fields of economic theory that warn against minimum wage hikes. Right. Because it's savage towards profit margins they tell you that they'll be forced to lay people off to scare you... even when they won't do any such thing.

mcny 7y ago

I don't believe that a business would keep an employee around for a minute more than it has to. I have zero sympathy towards "job creators" because they wouldn't hire people if they could avoid it. Rent is expensive just like college is expensive because we have artificially limited supply and made home ownership desirable. We talked about trickle down and look how the speculation has turned out. Higher minimum wages will lead to inflation and lower employment but it is worth it imo. We are externalizing the costs from employers which makes no sense. If someone is working full time, they shouldn't need public assistance for housing or food.