Quote:
Originally Posted by jyl
I can certainly see how things might play out as you say: minimum wage goes up, crappy unproductive workers get paid more for being crappy and unproductive, more businesses close down than open up.
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This makes sense
Quote:
Originally Posted by jyl
I can also see how it could play differently: minimum wage goes up, those higher wages get spent, some businesses benefit, the businesses paying minimum wage raise prices by a small percentage, it turns out that demand is inelastic, profit margins stay the same, worker turnover declines.
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This ignores the fact that labor is generally the single biggest expense of a small business, along with a lot of other things.
You can say you want to have a rational discussion, but you have to look at it rationally to do so.
Economics is a fairly complicated discipline, but there are a lot of things about it that are not. Say labor is half your expenses, or 50% of the total. If that half goes up by 60%, your total expenses go up 30%. How could your overhead rise by 30%, and you only raise your prices a few percent and stay in business? A lot of businesses run at 50% overhead, or half the money they get goes to keeping the business going. If you are going to give most of the money you otherwise would keep to your employees because of a change in the law, you don't think it would be more likely for you to shut it down?