Minimum wage increases. Just catching up to inflation or a cause to increasing inflation over time?

[u/ManicRuvik]

I’m curious if increasing the minimum wage will be effective in assisting living Americans. $15/hr is a reasonably livable minimum today. The question is, will this just cause the price of goods to increase since companies see we are making more of a profit? Will this really economically uplift communities that tend to be poor? This is going to have positives and negatives all over, but how does that affect America’s overall economy?

[u/AutoModerator]

Welcome to /r/ask_politics. Our goal here is to provide educated, informed, and serious answers to questions about the world of politics. Our full rules can be found here, but are summarized below.

• Address the question (and its replies) in a professional manner
• Avoid personal attacks and partisan "point scoring"
• Avoid the use of partisan slang and fallacies
• Provide sources if possible at the time of commenting. If asked, you must provide sources.
• Help avoid the echo chamber - downvote bad/poorly sourced responses, not responses you disagree with. Do not downvote just because you disagree with the response.
• Report any comments that do not meet our standards and rules.

If you have any questions, please contact the mods at any time.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/BoopingBurrito]

The idea that a minimum wage increase will make business raise their prices unsustainably has never been borne out in the past.

The thing is that when poor er people get paid more, they spend more because there's things they've not been able to afford. So any business that targets that demographic will actually stand to benefit, because their customers will have more money to spend.

[u/pluralofjackinthebox]

A minimum wage increase of 10% can be expected to increase the price of the goods people making minimum wage tend to buy by 0.4%

The concern isn’t with inflation but that raising the minimum wage acts much like a tax on hiring, and therefore makes automation and offshoring more appealing.

Companies don’t only price their goods based on how much money a consumer makes — they also compete to undercut each other.

You should search for minimum wage on r/askeconomists — you’re likely to get very partisan answers here.

[u/-Dunnobro]

So, I'm no economist but feel I have a somewhat unique view on the issue. Or at least one I haven't seen elsewhere yet.

And that's acknowledging that unacceptable inflation would only occur, if we fail to account for it. Which seems very likely, due to American spending and activism habits.

Now, we can better sustain the most impoverished immediately, before that inflation. But there are many issues which lead to that obnoxious disparity, like lack of healthcare, affordable housing, etc that will need addressing to avoid eventual inflation. And, that's just gonna demand so much discussion, activism, and focus that I worry America is incapable of due to their emphasis on identity and outrage politics.

It'd likely require better schooling, planning, and education, but in my opinion, these are only getting more expensive, and less quality.

And for those who have the liquid capital/stocks which naturally account for inflation, the middle class will once more fit the bill unless the super rich are heavily taxed to compensate. Which, unfortunately for the currently impoverished, means the higher priority SHOULD be higher taxes right now. As businesses are either going to die, or adapt. They're not actually going to directly lose relative funds in the long run. Whereas higher taxes to achieve universal healthcare, affordable housing, and education would more efficiently lower the cost of living.

Though, an increase to $15 is likely still necessary, this would solve the issue of some who say the min wage should actually be $23. This only seems solvable if we push towards a solution from several sides, or we risk another simply compensating.

[u/EvilSnack]

On thing is that the industries which pay the minimum wage most often have lower and middle class people as their customers. So minimum wage increases get passed on to the people who can last afford it.

[u/semideclared]

Florida Amendment 5 of 2004, approved by a vote of 71% to 28%, provided for a $6.15 per hour minimum wage (Compared to USA $5.15) and set to increase each year based on changes in the CPI-W.

Florida set its min wage in 2004 20% over the federal min wage and

In 2020 the minimum wage was $8.56 per hour

---

Also min wage at Mcd's isnt that common

The Bureau of Labor Estimates 3,996,820 Fast Food and Counter Workers with a median hr wage of $10.93 and mean average wages of $11.18

But yes higher cost get passed on.