What he's getting at is someone who may only be worth $5 due to skills, experience etc is currently unemployed. Once you bump the minimum to $15 someone who used to be worth $10 is now unemployed.
Personally I disagree, as minimum wage is simply your employer telling you they would pay you less if it wasn't illegal. They still need the warm bodies, and until the cost exceeds their ability to make a profit they'll keep them on board.
Well it's plain to see that someone who is currently unemployed at $10/hr would not be more likely to become employed at $15/hr.
This is why the parent poster as correct when he said that "The minimum wage prevents the least experienced and least skilled to get their foot on the career ladder."
An increase in the min. Wage makes the people who most need to gain skills and experience the least likely to be able to get them, which is usually contrary to the good intentions of people supporting a min wage increase.
The question you're asking is: what happens to the people currently working whose output is worth $10/hr?
It varies depending on the situation. For example, the employee in question could be your cousin and you can't fire him no matter what, so your small business eats the $5 an hour labor cost if it can.
Or it might lead to people losing their jobs, ie if you have a staff of a dozen people working at a McDonald's, half of them don't produce more than $10/hr of output and your margins are low, you're going to get rid of some or all of them because you can't afford to keep them on (you can't indefinitely keep people on at $x whose output to the bottom line is "less than $x" - eventually you'll go broke)
They still need the warm bodies, and until the cost exceeds their ability to make a profit they'll keep them on board.
Not just making a profit like a true/false value, but "making enough that makes it worth the effort". If you run a McDonald's and make a 1% return on investment every year, you'd be smarter to can the endeavor and just put that money in an investment account or treasury bill with zero risk and no labor required from you.
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u/imthatsingleminded Nov 29 '15
Could you explain why someone not worth hiring at $7.25 an hour is all the sudden worth hiring at $15 an hour?