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>should know better than to generalize from one sample It isn't simply looking at one data point; there are economic fundamentals that demonstrate that this wi
by hnnewguy 12y ago
>should know better than to generalize from one sample
It isn't simply looking at one data point; there are economic fundamentals that demonstrate that this will occur. Just grab any Econ 101 textbook. Granted, it isn't a straight-up loss, as there is some income re-distribution that occurs, putting more money in the pockets of low-wage earners.
It's never been clear to me why this is so controversial. If I have organized my business around the fact that I am getting $10.50 worth of production from workers that I pay $10.00, then suddenly I have to pay those same workers $14.00, the math no longer works. Someone will be out of work, or I'll be out of business, period.
- pbh101 12y agoThe implicit assumption as far as I can tell is that you, as "nasty business owner", are making much more than 50 cents of margin on your employees' hourly labor and that minimum wage hikes will make you eat that cost. I haven't looked closely into the studies put forth, but it is repeatedly mentioned that studies show that unemployment (and partial employment) doesn't go up when the minimum wage increases.
- pixl97 12y ago> Someone will be out of work, or I'll be out of business, period. Incorrect, unless you're very inefficient and your competitors are efficient. If you are operating at maximum efficiently, you'll raise your rates to $14.50 and your customers will pay it or go without, no other competitor will be able to sell for less than that without losing money. It's more likely you'll go out of business because your competing businesses allocate their capital more effectively, surviving on smaller profit margins. At worst for the customer they will pay the same effective rate after the wage increase.