Question about raising the minimum wage.

0/10

Subject to revision depending upon how fierce the debate gets.

Still, you might try finding some new material.

Perhaps, see 5,6,7

If raising employees' wages made them more productive as measured by an increase in net income to the business resulting from their work, employers would raise the wages on their own. How a minimum wage hike affects profits depends upon whether employers choose to retain workers and hire new people at the higher minimum wage level. In many cases, the answer is no, and employers change their business model or close parts of their businesses to avoid the expense of employing people. In this case, there is an invisible loss of revenues resulting from the negation of business operations that cannot occur at the new minimum wage level. If a business simply retains all its workers at the new higher wage, all other factors being equal, it loses money. But this fact introduces another problem, which is that some businesses—big, established ones with established revenues and lots of retained earnings–can afford to withstand a minimum wage hike much more easily than small businesses and startups. As a result of the fact that the minimum wage hike forces newer and smaller businesses who are unable to cope with the expense to close their doors, bigger businesses with more staying power acquire their lost market shares and actually make more money, albeit only as an unfair result of bad government policies, and leading to unnatural wealth concentration that would not occur in a free market.

In summary, the minimum wage is a purely destructive policy that is bad for almost everyone, although a few very rich people benefit from it.

Raising minimum wage could potentially destroy the economy, it will only do harm, people think they are getting more money but the price of evwrything goes up and they end up losing money

OR, increased income by everyone in the community leads to more spending by them which increases revenue to the businesses which may offset the increase in expenses and maintain profit.

If you were selling something, wouldn't you want your customers to be making more money so they can buy more of your stuff?

Raising minimum wage could potentially destroy the economy, it will only do harm, people think they are getting more money but the price of evwrything goes up and they end up losing money

tryna roonalut wrote:

Raising minimum wage could potentially destroy the economy, it will only do harm, people think they are getting more money but the price of evwrything goes up and they end up losing money

. Same conservative bs we heard every other time the wage was raised

XR wrote:

OR, increased income by everyone in the community leads to more spending by them which increases revenue to the businesses which may offset the increase in expenses and maintain profit.

If one thing is certain, you did not major in economics. But thank you for this inside look on the cluelessness of liberal thinking, it's actually kind of fascinating.

Enlighten me on how the economy tanked every other time the wage was raised (the economy did not tank). And enlighten me on why conservatives think they are for some reason the authority on economics... It is frustrating really

tryna roonalut wrote:

Raising minimum wage could potentially destroy the economy, it will only do harm, people think they are getting more money but the price of evwrything goes up and they end up losing money

And all the union employees that have negotiated good contracts will now be back with the pack, negating all their years of negotiations.

Are you saying that an increase in wages does not lead to an increase in spending?

Raising the minimum wage leads to people losing their jobs. FACT.

It is not a fact that it leads to people losing their jobs.

Someone posted an article where economists disagree on that very thing.

But it is a fact that it leads to more consumer spending.

If someone who works minimums wage earns one more dollar they will spend that dollar.

So that is some business then earning one more dollar.

XR wrote:

It is not a fact that it leads to people losing their jobs.

Someone posted an article where economists disagree on that very thing.

But it is a fact that it leads to more consumer spending.

If someone who works minimums wage earns one more dollar they will spend that dollar.

So that is some business then earning one more dollar.

Almost 40% of small business owners recently said they would employ fewer workers if the minimum wage was raised like it has been discussed. If you have a small business with 20 workers earning minimum wage. You are struggling to get make ends meet. You are forced to begin paying them $15 and hour as opposed to $7.whatever. Double! You will keep all of those 20 employees on the payroll? Seriously???

Here is a thought. The BLS says 1.6 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 2.0 million had wages below the federal minimum. 3.6 million total.

If the minimum is raised to $10, that's $2.75 per hour per person. If we conservatively guess that these people are working 20 hours per week, 50 weeks per year, then that adds up to $9.9 billion injected into the economy. 30 hours per week is $14.85 billion.

I think it's also safe to assume that people making the minimum are not saving much of their income. In fact, they are probably spending a large amount of their income at businesses that employ min wage workers (e.g. grocery, gas, fast food, target, walmart) or services (e.g. cable/sat, cell, utilities).

To me, that looks like a lot of extra opportunities to sell your product that you didn't have before. And more people buying more stuff drives the other aspects of the economy like shipping, distribution, and production.

So the original question of net profit depends on whether wages are raised in isolation or on a large scale. If one business raises wages, I guess their net profit would likely go down. If the scenario I described above transpires, then I think it's likely that an increase in gross income offsets some of the difference in increased wages.

XR wrote:

But it is a fact that it leads to more consumer spending.

If someone who works minimums wage earns one more dollar they will spend that dollar.

So that is some business then earning one more dollar.

LOL! This is getting more entertaining! A raise in the minimum wage is a business spending one more dollar on an employee for no additional benefit. And then if the employee spends that dollar they make a small fraction of profit back, not the whole dollar they lost.

But hey, I got a better idea, why doesn't the government just print more money and give it to everybody! What say you, XR?

Your rosy scenario makes so much sense. Thus, let's raise minimum wage from $7.20 to $50. Those currently making minimum wage will spend that extra $42.50 per hour. The economy will boom like never before!

You can rig the numbers to tell any story.

There is no proposal to go to $15 in one shot.

Sure that would kill jobs. You got me.

You don't need to take polls on what owners think they might do.

You can go back and look at what they did do when the minimum went up.

And it's not small business that hire most of the minimum wage workers, it's big businesses that pay that wage.

Teenager wrote:

Enlighten me on how the economy tanked every other time the wage was raised (the economy did not tank). And enlighten me on why conservatives think they are for some reason the authority on economics... It is frustrating really

Hey, teenager, I'm glad you want to learn!

Do this simple thought experiment. Suppose the government raised the minimum wage to $1,000 per hour. What would happen? Try to figure it out. Okay, now $1,000 isn't realistic, but consider $500. Would that work? No. How about $15? I don't know, that's what needs to be demonstrated. But liberals don't want to demonstrate this, because that would require too much thinking, they would much rather use your emotions and make rich people look like the devil. Just look at this thread.

Hope this helps.