This equation has two sides, remember? Minimum wages will benefit the poorest people the most by increasing their income, all while increasing prices generally - which everyone pays for. Among the poorest you will see an increase in purchasing power, while everyone else's will be slightly reduced. This isn't hard to grasp, really.
Also, at least in Germany, there has been no statistically significant change to general employment when the minimum wage was introduced. There have however been some marginal price increases as well as reduced employment (< -2% according to some sources) in those sectors affected, which are offset by roughly 5% higher wages in those sectors, as well as increased employment in other sectors. Total employment even increased. That works out to a net positive in my book.
I didn't buy the oppositions arguments when the minimum wage was introduced, and I don't buy their same arguments now that they are against increasing it.
https://www.bmwi.de/Redaktion/DE/Downloads/Diskussionspapier...
The problem is most of the poor don't actually get that bump. None of the people who lose their jobs do, nor anyone who was already unemployed, nor the people whose wages were already just above the new minimum wage. But they all have to pay the higher prices.
> Also, at least in Germany, there has been no statistically significant change to general employment when the minimum wage was introduced.
This is quite unsurprising. The vast majority of people make more than minimum wage so instituting a minimum wage would have little to no effect on their employment. The loss of employment is to the people who had been making less than the new minimum wage.
People are often surprised how few people actually make minimum wage. It's a low single digit percentage of people.
> There have however been some marginal price increases as well as reduced employment (< -2% according to some sources) in those sectors affected, which are offset by roughly 5% higher wages in those sectors, as well as increased employment in other sectors. Total employment even increased. That works out to a net positive in my book.
This is purporting to show the effects of a minimum wage that only existed for little more than a year when the studies were done. It takes longer than that for some companies to realign their operations with the new costs, e.g. to replace your checkout clerks with machines you have to negotiate with suppliers, evaluate the machines, deploy them, etc. In the meantime you keep the employees and eat the higher cost, but only temporarily.
This is why evaluating this kind of thing is extremely difficult. It can take a decade or more to fully shake out, but the number of confounders that can appear in that time frame make it difficult to distinguish the effects of the minimum wage from everything else that happens in the economy. That's why the issue remains contentious.
More annoyingly, studies in different economies are not comparable. To see why, imagine the effects of a $5000/hour minimum wage. Obviously an unemployment disaster. Meanwhile a $0.05/hour minimum wage would cause approximately no unemployment, but also yield no other benefits.
The amount of unemployment caused by a given minimum wage is determined by dynamic characteristics of the economy. The same minimum wage will cause different amounts of unemployment in Pennsylvania than California etc., or different amounts in 2005 than 2015.
It's all too easy to screw it up and end up on the wrong side of the equation. And even when it's "working" you're still severely screwing over a small percentage of the working poor in exchange for a very modest wage increase for the remainder.
Then doesn't the same thing happen to the person who loses their job to a minimum wage increase? You can't spend all day learning a new trade if you have to spend all day chasing jobs you're not qualified to do yet.
It seems like your quarrel is with the unemployment rules, e.g. maybe they should be replaced with a UBI.
> Low income customers? We have a minimum wage now remember? If at all it's gonna hurt richer customers who are now a little less rich compared to the rest.
Your argument is that raising consumer prices hurts rich people more than poor people?
> I was speaking of the burden places like Walmart etc. create because of indirect government subsidies.
I have a hard time faulting a company for hiring people who would otherwise be unemployed. And the subsidies are ostensibly there to help the employees. Who do you expect it to hurt more if we got rid of them, the company or the workers?
> There's a lack of logical connection between those two sentences, probably a third sentence missing in between?
The premise is that regulatory overhead is increasing unit costs. In response a company can do one of two things. If they don't raise prices then they maintain their customer volume but have reduced margins. If they do raise prices then they maintain their margins but suffer reduced customer volume. In both cases they make less money and the smaller company may no longer be making enough to cover their fixed costs.
> The point I seem to fail to bring across is that you're paying the higher prices for goods produced fairly RIGHT NOW. You're just not paying them at the counter, you're paying them with your taxes.
The direct cause of that is social assistance to low income people. It makes no sense to at the same time have a policy of providing assistance to the working poor and prohibit them from working at those wages. At least one of them is wrong.
When the alternative to $5 wages isn't higher wages but higher unemployment, the company paying the $5 wages isn't a drain in society -- it's reducing by $5/hr the amount of social assistance needed to keep those people from starving.
The real source of the problem is that there are people whose labor is not worth a living wage. But minimum wage doesn't change that. If there was someone willing to pay $20/hr then they wouldn't be working for $5/hr. Prohibiting them from working for low wages just makes them unemployed and even more reliant on social assistance.
If you want an actual solution, try policies that reduce the market price of necessities like housing and medicine, so that the wages of unskilled labor are survivable without the need for social assistance.