The minimum wage was originally designed in the 50s specifically to keep workers above the poverty level. It was often reset so that a 40-hour work week would keep a family out of poverty. This linkage was broken in the 1970s and the minimum wage stagnated for generations.
There were no such ill effects when the minimum wage was above the poverty level. In fact, there was decades of growth at all levels of the economy. One might also note that this was a time when the franchise restaurant industry first grew and thrived - with minimum wages above poverty levels.
Sure, wages might cause prices to go up, but it is nowhere near a 1:1 ratio, at the first order because front-line labor is simply only one component of the costs, among other major cost categories including capital expense, real estate costs, cost of goods sold, administration, sales & marketing, etc.. Even assuming that costs are evenly allocated across those 6 categories, doubling front-line wages would result in only a 16% increase in overall costs, much of which would not be passed on to the consumer, and which often results in a higher quality product or service from better paid workers.
The lower 3-4 deciles wiuld now have double the income, and multiples of that in increased disposable income, yet prices might rise 5-10% over the intervening years. The 5-7 deciles would barely reduce their consumption with a 10% inflation, likely far less than the 1-4 deciles increased and upgraded consumption, and the top deciles DGAF.
And aside from the beneficial economic effects, it is just the right thing to do, even if there are some minor costs. The idea that "you can't impose even a cent of costs on me to better everyone" is truly ugly. We live in a complex society, not some solipsistic universe solely for the benefit of "#1". Don't be that "#1".
I mentioned demographic reasons in my comment because of the decreasing birthrate. The birthrate in the 50s was much different than today, and the sheer momentum of demand caused by new, young people enter society can be a cause of economic growth (the "pie" increasing in size that I was referring to).
With the new parameters of an aging population, I think the situation may very well be different, and already has had an effect over the past 2 decades.
>And aside from the beneficial economic effects, it is just the right thing to do, even if there are some minor costs. The idea that "you can't impose even a cent of costs on me to better everyone" is truly ugly. We live in a complex society, not some solipsistic universe solely for the benefit of "#1". Don't be that "#1".
I also welcome a reduction in wealth/income inequality. I simply think a large part of the reduction will come at the expense of other deciles, which matters because it then affects politics. I actually think it is at the root of the political tension and tribalism in the country, because certain tribes are moving down the socioeconomic ladder relative to others.
TLDR Fatter middle class, thinner lower and upper classes.
Employees in the 1st to 3rd decile will have funds to buy stuff and generate demand. The 4th to 6th decile of income will have to cut consumption, however.
The deciles are of course made up, but my point is someone will have to cut down on consumption if others that were not getting a piece of the pie start getting it (unless the size of the pie gets larger at the same rate, but it will not in this case due to demographic reasons and the type of work not being able to be automated).