The reality is that increasing the minimum wage has mixed results, but is not the widespread destruction in employment that people like Pugh fear.

In many ways, increasing the minimum wage increases the disposable income spent at locations that hire minimum wage earners. Paying poor people enough for a bit of entertainment or one more sandwich from Subway each month will result in higher demand for those businesses.

The most effective way to increase spending in a community is to increase the take home pay of the lowest paid people, because they spend the money as soon as they get it; in economic terms, it increases the velocity of money through the economy.

@zenvelo GA!

I wonder if there are any examples where raising the minimum wage resulted in the kind of destruction this article describes. Such as a city or a state one could point to and say, “this is why raising the minimum wage is actually bad, look what happened when they did it.”

I also wonder if in light of this statement “If the minimum wage is higher than a worker’s marginal productivity, the employer will have no other choice than to lay him or her off” it wouldn’t make sense to calculate minimum wage as some percent of a company’s income.

It should be raised, but not to 15.

I always wondered. If you raise it to 15, does that mean that people who used to make 15 now get $30/hr?

It’s quite complicated.

Seattle is going to be a big test case, so far there hasn’t been any death and destruction (article on an early study). So far the consensus seems to be that there isn’t a huge effect overall, but individuals can certainly see dramatic changes.

I’m all for it if it works. I think it’s great that there’s real life tests going on so we can see what happens rather than theorizing about something this complex. We should know in a couple years.

Yes. Not $15, but I’m a yes for $12.

My immediate reaction upon reading this article was to look at who’s behind it. It turns out that the usual suspects, the Chamber of Commerce, ALEC, and the lot – you know the bunch dedicated to shoestringing people who work for a living – they’re all hard at it propagandizing economic views assuring the upward flow of wealth at the expense of guess who? And this little gem is the product of FEE, the so called Foundation for Economic Education, staunch allies of and barely disguised advocates for the ongoing enhancement of the 1%. These folks are always there to push the notion that prosperity and sound economics is about refusing workers a living wage even in a country with the wealth of the United States. You can buy it if you want, but if you follow the argument of this crowd to it’s logical conclusion, the ideal society is one in which workers are paid nothing at all.

@stanleybmanly yeah, that site has a very heavy conservative bias.

Of course it does. In the end, this is not a complex matter at all. If productivity is increasing as it has been for decades, and wages are stagnant or declining, where are the productivity gains going? CLEARLY, those gains are not going to the people doing the work. Want some more clues? If wages are stagnant or declining while the stock market goes through the roof, who’s taking the hit and who’s fattening up?

Good point!

Preach on @stanleybmanly…

One thing about $15/hour in Seattle is that it comes after a few years of extreme increases in rents (not to mention house prices) to annoyingly high levels except for people who live in places that haven’t raised rents, share with several rent-payers, or have other arrangements.

I can toss a rock and hit the apartment I lived in when I was 15 to 17. It is right across the alley.

Seriously, 50 feet away.

When I lived there 25 years ago the rent was 650 a month for a two bedroom. I’m paying 615 a month for my current two bedroom. The rent has basically been unchanged for 25 years. But minimum wage has doubled.

Rent is generally the biggest chunk of your income. Where I live supply and demand has pretty much stayed steady over the last few decades with rentals. Same with a awesome sandwich at Arby’s. A mouthwatering Arby’s Melt costs nearls the same as it did 25 years ago.

@johnpowell – Rent here has almost doubled in 6 years, so I’m guessing most places are somewhere in the middle.

The big line from huge corporations is that employers will have to go out of business if they pay more than they’re paying now. The reality is maybe those huge corporations should stop paying their highest earners multi-million dollar salaries and bonuses. Maybe if they cut a few mil off the top of each of the big shots’ wages, they wouldn’t have to cry so much at the thought of a few extra dollars for the little guy.

As a small business owner I’d like to pay my people more for many reasons. If they raise minimum wage maybe all my competitors will raise what they charge, and then I could pay them more and charge more. I already pay them way more than minimum, but with a hike in the minimum wage the population will probably accept slightly higher prices. It’s like when AIDS started and they finally passed a law that dentists must where gloves. I mean really, WTH? How is it possible some didn’t I don’t know. The worry was patients would be offended if suddenly his dentist insisted on wearing gloves, by making the law the dentist no longer had to worry about that.

Another reason I wish I could pay more is I have an employee taking advantage of us, and I’m sure part of the reason is he gets government help. Part of it is because he has a child with health problems, I don’t know if part of it is because of what we pay, but I think it’s possible. I don’t know the cut off in Florida. That check he gets from the government, combined with we are very busy, and need to hire another mechanic means he’s feeling very Vicky right now, showing up late to work, and some other stuff. I think if he was more dependent on what we pay (like I said I wish it was higher) and couldn’t rely on the government so much, it would be better.

This has nothing to do with the help he receives for medical care for his son. I have no problem with that.

@JLeslie – people shouldn’t take advantage of business owners, but wow, you have a skilled, experienced mechanic that you pay under $15/hr? The rate may really be limiting your options there. A job isn’t as valuable if it’s easy to replace. Fast food places pay $11–14 to start here.

Just offering another perspective, you know your business much better than I do, but can you imagine reading that from the perspective of a potential employee?

@funkdaddy: She’s in a right to work state, which means all of the wages are lower there.

@funkydaddy Yes, I pay less than $15, and like I said I’d rather pay more than I do pay. Of course I can imagine from the employee’s perspective, I was the employee most of my working life. Look at most of my comments on fluther regarding labor, pay, capitalism, and you will see I lean very much towards “labor.”

One of my competitors is the developer of the town I live in, and the locations they work from are commercial spaces they built, and they lease the rest of the plaza to other stores including major grocery chains. They basically pay nothing for their locations so their prices can stay low. From what I understand I pay my mechanics better than them, but I don’t know it for a fact. I’d like to know.

People like moving down here, because some things are cheaper than the state they are coming from, but if you enjoy lower prices, most likely part of that is lower pay. If you’re retired it’s a bonanza, if you still have to work, it’s basically even.

Also, Florida has no income tax, so when you earn $15 an hour here, it’s worth more than most other states, although, below a certain amount probably you don’t even pay state taxes. If you make $100k then paying no income tax is awesome.

It’s my first year as a business owner (I have previously been self employed, but there wasn’t much to take in deductions) and it’s interesting to see the tax benefits, and how that all works. The payroll taxes for my employees are frustrating, but nothing I can do about that. I now can have my business pay for part of my car, probably I should be taking more of a deduction on that than I do, and the depreciation on our work vans helps reduce our profit.

@jca and @JLeslie – I live in Texas, which is right to work (as are most states), we also have no state income tax. I believe the salaries are probably comparable and I’d guess cost of living is probably higher here.

I wasn’t trying to make a comment on you as a person @JLeslie, perhaps I should have clarified that, I’m sorry. I just meant for your business. One $25/hr mechanic that will be with you for years, and knows what they are doing, might work a lot better than a revolving group of $12 mechanics that you need two of. You can pick a better fit if you have more candidates and better pay will get more candidates.

I had a friend who worked at an adult shop a while back. Their cashiers made something like $18 – $20/hr and they would get hundreds of applicants whenever a position opened. They wanted to make sure their shop was welcoming, positive, helpful, and not creepy. Having all those candidates made it possible to keep it that way and their prices didn’t matter as much since people were comfortable going there.

@funkdaddy It’s the part of FL I’m in. in Southeast FL the pay would be higher. A house that costs $200k here would be $350 in southeast FL.

I don’t really have a revolving door. The guy who owned it before us had people last a couple of years, although the two guys with us now, who we inherited from him, now have 1.5 years with the company. We already raised them each a dollar.

I didn’t take anything negatively or personally, not to worry.

@JLeslie: A dollar raise on a ten or eleven dollar wage is pretty good.

We give them a week paid vacation and 6 paid holidays a year. Most little operations like us don’t do that.

It sounds like not a bad job and not a bad employer, @JLeslie.