A little primer regarding the ‘minimum wage.’
Understand exactly what a hike in the ‘minimum wage’ entails.
A compulsory hike in the minimum wage means that the price of productivity will increase.
This means that the level of what one used to purchase per dollar is less; therefore, one will be required to spend more to get the same amount of productivity.
What a set amount of money bought before the hike in the minimum wage, can no longer be bought for the same amount of money. After the hike, more money must be spent, to get the same level of productivity.
Money, is then, by definition, devalued. When money is devalued, the amount of it required to purchase a given good or service increases.
This increase is called INFLATION.
One of two things MUST happen in order to regain equilibrium between resources spent and goods produced or purchased:
1. Pass along the increased price (inflation) of goods or services to the customer; or
2. Make sure the money you spend on the manufacturing/service end results in more productivity.
Option number one results in inflation in the marketplace (rise in prices to purchase goods or services) passed on to all. This means that the money earned after the minimum wage hike has less purchasing power than the money earned prior to the minimum wage hike. This effectively negates the purchasing power experienced via any raise in pay to the worker as a result of hiking the minimum wage.
Option Number Two results in fewer workers doing more work per hour for the increased pay they get. Instead of seven people on a shift, to keep the same productivity without passing increased costs to the consumer, there may be only five people required to do the work that seven people once did. This effectively results in a reduction in the present work force at worst, or in preventing the company from hiring additional workers after attrition, at best.
This, of course, results in higher unemployment and/or lower labor participation rates, as there are now fewer jobs to be had.
In other words, contrary to all the magical thinking going on in the White House and in the war rooms of the DNC, and yes, among the democrat party faithful, there are no sustainable benefits to a *compulsory* increase in the minimum wage.