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> “…there seems to be no discernible correlation between minimum wage increases and a rise in business failures, either in the year the increase occurred or in

> “…there seems to be no discernible correlation between minimum wage increases and a rise in business failures, either in the year the increase occurred or in the following year. If anything, the evidence leans the other way” Yes but this actually supports my argument; An increase of the minimum wage solidifies incumbent businesses. This occurs because increasing the min wage is the same as increasing a barrier to entry. Sure, the incumbents won’t fail, but you are effectively making it more difficult for new participants to start. Business failures won’t increase and neither will the rate of new businesses. > “In general, businesses will pay the least they can get away with, no matter how many there are.” Yes this is true. But employees will compete for employers that pay higher and a community with more businesses will have a larger pie to eat from because there is more overall value created.

h0l0cube 5y ago
> This occurs because increasing the min wage is the same as increasing a barrier to entry. Do you have some data to back this up, or are you just speculating? To posit my own speculation, could it be if people have more money for discretionary spending there could be more businesses to service them? > But employees will compete for employers that pay higher and a community with more businesses This seems a little naive. Low skilled and unskilled labor in smaller/poorer towns, with less/no transport available, less/no money to self-train/self-improve etc. etc. are just going to take whatever's available. There's no incentive for a fast food franchise or a supermarket to pay more, because the labor market is saturated for low income work.
- GaryTang 5y ago
  > “… could it be if people have more money for discretionary spending there could be more businesses to service them?” This would be true if people did have more money for discretionary spending, but increasing the minimum wage has shown to decrease their total compensation. I don’t know how reliable the following article is but the summary expands on a few reasons on how this happens. https://hbr.org/2021/06/research-when-a-higher-minimum-wage-leads-to-lower-compensation https://hbr.org/2021/06/research-when-a-higher-minimum-wage-... > “… (employees) are just going to take whatever's available” This is why it’s important to increase the opportunities available for them. More wealth creation means more wealth. I will get back to you on the citation for this.
  - h0l0cube 5y ago
    From the article: > We found that for every $1 increase in minimum wage, the percentage of workers working more than 20 hours per week (making them eligible for retirement benefits) decreased by 23.0%, while the percentage of workers with more than 30 hours per week (making them eligible for health care benefits) decreased by 14.9%. To be fair, this isn't an argument against minimum wage, but an argument for reform in health care and retirement funding. Keep in mind, this technique was always available to them, this almost seems a spiteful reaction, or at least they would have done it sooner if they'd thought to. > More wealth creation means more wealth. Does it mean more income to the lowest earners in a high-GDP country? Or does it just mean GDP has increased?

h0l0cube 5y ago

> This occurs because increasing the min wage is the same as increasing a barrier to entry. Do you have some data to back this up, or are you just speculating? To posit my own speculation, could it be if people have more money for discretionary spending there could be more businesses to service them? > But employees will compete for employers that pay higher and a community with more businesses This seems a little naive. Low skilled and unskilled labor in smaller/poorer towns, with less/no transport available, less/no money to self-train/self-improve etc. etc. are just going to take whatever's available. There's no incentive for a fast food franchise or a supermarket to pay more, because the labor market is saturated for low income work.

GaryTang 5y ago
> “… could it be if people have more money for discretionary spending there could be more businesses to service them?” This would be true if people did have more money for discretionary spending, but increasing the minimum wage has shown to decrease their total compensation. I don’t know how reliable the following article is but the summary expands on a few reasons on how this happens. https://hbr.org/2021/06/research-when-a-higher-minimum-wage-leads-to-lower-compensation https://hbr.org/2021/06/research-when-a-higher-minimum-wage-... > “… (employees) are just going to take whatever's available” This is why it’s important to increase the opportunities available for them. More wealth creation means more wealth. I will get back to you on the citation for this.
- h0l0cube 5y ago
  From the article: > We found that for every $1 increase in minimum wage, the percentage of workers working more than 20 hours per week (making them eligible for retirement benefits) decreased by 23.0%, while the percentage of workers with more than 30 hours per week (making them eligible for health care benefits) decreased by 14.9%. To be fair, this isn't an argument against minimum wage, but an argument for reform in health care and retirement funding. Keep in mind, this technique was always available to them, this almost seems a spiteful reaction, or at least they would have done it sooner if they'd thought to. > More wealth creation means more wealth. Does it mean more income to the lowest earners in a high-GDP country? Or does it just mean GDP has increased?