What I find interesting is none of the 'minimum wage causes no harm' advocates are willing to answer my question: If $15 is fine why not $100?
I think it is pretty obvious the reason is they don't answer is they don't want to acknowledge the basic premise that raising minimum wages does cause harm and the only thing we can really discuss is if there are situations where the harm caused is small enough that we can raise it despite the harms. For my part, I would agree that raising the wages when the economy is growing and the amount is at least comparable to the rate of inflation is likely fine. Any higher than that and you asking for trouble - especially when the next recession hits. There are likely other criteria such as the relationship between the median wage and the minimum wage which need to be considered as well.
Unfortunately, we can't get to a discussion about the evaluating the circumstances where a minimum wage hike is likely OK because the minimum wage advocates are too ideological to accept what should be an obvious point: "increasing minimum wages causes harm'.
I think everybody understands that the money doesn't come out of thin air and that it has to come from somewhere. Maybe it's from the pockets of the business operator, or maybe it's from the pockets of the customers, or maybe some of both.
What's the yardstick for "harm" though? Is "harm" the point where the employer decides not to hire an additional staff member? Is it the point at which the employer decides his margins have become too thin and decides to just close the business?
I avoid Tim's and McDonald's and the like as much as possible, but my observation has been that they're already using the bare minimum number of employees. I don't think the notion of hiring additional crew ever crosses their mind. It's not like there's a lot of fat that they can trim that hasn't already been trimmed. As for their margins, I think that while some franchises might be teetering on the brink, many are probably doing quite well. There must be some reason why people keep opening more of these wretched things. If the change in minimum wage pushes some of the less profitable franchises over the brink... is that really such a bad thing?
Your premise that the expense of the paying minimum wages workers more is too small to affect the inflation rate is reasonable but will you accept the corollary that the boost to GDP from all those minimum wage workers spending their extra wages is also too small to be noticeable?
Not necessarily. I agree with the premise that no new wealth is being created. Raising the minimum wage is, essentially, a redistribution of existing wealth-- the raise doesn't come from thin air, it comes from the pockets of the franchise operator and/or customers who pay higher prices.
But putting more money in the pockets of people who have the highest propensity to spend isn't a bad economic move. It's economic stimulus. It's a staple of typical conservative economic thought, actually. If the franchise operator has that $10 a day, most of that money is probably going into some kind of investment strategy. If the employee has that money, it's getting spent. The working poor spend everything they earn just to meet their daily needs. The raise they're getting is going straight back into the economy.
Another point to consider: the only reason the effect on inflation is small is because most of the labour intensive goods we buy come from places with much lower wages and that higher minimum wages will simply encourage the import of more goods from cheaper locales.
So? Are there any minimum-wage manufacturing jobs left here to save?
I agree that TFWs for minimum wage retail jobs should be banned. If they need workers raise wages. It is interesting that most people think Henry Ford raised wages so 'his employees could buy his cars' but that is not true. Ford raised wages because he had to compete for labour and wanted to reduce employee turnover.
I hear "free market" people complaining that the government shouldn't meddle in the labor market by setting a minimum wage, but I never hear "free market" people complaining that the government is already meddling in the labor market by pursuing policies that put a downward pressure on wages. We get these lobby groups like Restaurants Canada continually pleading to the government for help because "we can't find enough workers", but that statement should always be appended with "...at the wages we're willing to pay."
-k