also, RAWR!
So, the minimum wage is increasing in the near future, but i'm not happy about it. Why? Because all the arguments with respect to it, while sensible, are only looking at half of the equation.
As with anything else in economics, there are two sides of the issue, supply and demand. It seems as though everyone who endorses increased minimum wage looks at it from the supply side of things, that it will supply the poor with more money. There is another side of things, however. The poor, who likely get their products from cheaper sources are, in turn, paying the salaries of other minimum wage employees. And all of a sudden, these minimum wage employers have to pay more to accomplish the same amount of work. Meaning that the work costs more. Meaning that the product of that work will cost more. Meaning that they're going to charge their customers more. I saw it when i was working a minimum wage job and the wages were hiked. Sure, i got more money. Wonderful. But all of a sudden, i couldn't afford to eat out as often as i used to be able to, because the prices at the places i went jumped.
There is another problem: Scarcity. According to one chart i saw, minimum wage has risen pretty steadily over the past 60 or so years, yet the wage in 2009 dollars has more or less held around the same level. This makes me wonder whether an increase in minimum wage drives inflation. It follows from my problem above, i think.
...So yes, minimum wage going up is great in that you get more money. But it's absolute crap in that it means that the poverty line is similarly going to creep up to include a few of those who previously were above it. No help for the poorest, harm inflicted on everyone else. How is this a good thing?
As with anything else in economics, there are two sides of the issue, supply and demand. It seems as though everyone who endorses increased minimum wage looks at it from the supply side of things, that it will supply the poor with more money. There is another side of things, however. The poor, who likely get their products from cheaper sources are, in turn, paying the salaries of other minimum wage employees. And all of a sudden, these minimum wage employers have to pay more to accomplish the same amount of work. Meaning that the work costs more. Meaning that the product of that work will cost more. Meaning that they're going to charge their customers more. I saw it when i was working a minimum wage job and the wages were hiked. Sure, i got more money. Wonderful. But all of a sudden, i couldn't afford to eat out as often as i used to be able to, because the prices at the places i went jumped.
There is another problem: Scarcity. According to one chart i saw, minimum wage has risen pretty steadily over the past 60 or so years, yet the wage in 2009 dollars has more or less held around the same level. This makes me wonder whether an increase in minimum wage drives inflation. It follows from my problem above, i think.
...So yes, minimum wage going up is great in that you get more money. But it's absolute crap in that it means that the poverty line is similarly going to creep up to include a few of those who previously were above it. No help for the poorest, harm inflicted on everyone else. How is this a good thing?