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Originally Posted by mostpost
20K? That figure is meaningless. You simply don't know how much an increase in the minimum wage is going to affect a company.
In Seattle, the minimum wage will go from $10.00 an hour to $10.50 an hour on Jan. 1, 2016. That is an increase of 5%. 5% of labor costs. Not 5% of materials cost. Not 5% of operating costs. (by operating costs I mean things like electricity, heat etc.) Just 5% of one aspect of total costs. Unless all of your employees are minimum wage it is not even 5% of your labor costs.
But how do you recoup those extra costs? You raise your prices by 5%. A ten dollar meal now costs $10.50. A fifteen dollar meal now costs $15.75.
A six dollar banana split is $6.30. Very few people will even notice. Those who do will pay the few cents extra as long as the quality of the food and the ambiance remain what they have come to expect.
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Forget it, you still don't understand the point. The actual dollar figures I used were meaningless. I was illustrating a point.
The point is that increased salaries for minimum wages HIT SOME COMPANIES HARD but don't hit others at all.
The increased spending from higher wages does not go back dollar for dollar to the companies that were hit hard. It gets spread around. That is important.
If companies raise prices, it takes wages out of the system because people are spending more for the same thing and have less left to buy other things as a result (net negative).
There's no escaping the fact that the net effect is that some workers are better off, some lose their job, and overall it's a net negative.
