USA TODAY: …San Jose is among a handful of cities, and nearly two dozen states, that have filled the void by boosting their minimum wages above the $7.25-an-hour federal minimum. Seattle last week voted to raise its minimum wage to $15 an hour over several years, the highest in the nation.
At least 30 states are considering increases as part of a movement to lift the income of low-wage workers and narrow a widening divide between rich and poor.
Nestled in Silicon Valley, San Jose is one of the nation’s most prosperous cities, possibly making it easier for businesses to raise prices without suffering a drop-off in sales, says Michael Reich, the University of California-Berkeley economics professor who has been studying the effects of San Jose’s higher minimum wage. Still, Reich says job growth in the city has fared well compared with similar nearby communities that did not raise their minimum wages… (more)
EDITOR: Cut throat competition combined with high unemployment drives down wages for entire industries. When minimums are increased, the wages go up for the entire industry and market. The main effect is a small increase in prices to consumers.
The existence or threat of unionization used to keep wages at a decent level. But the movement is largely moribund and individual workers have not way to negotiate with employers. In turn the individual company is facing competition and cannot afford to increase wages on it’s own.
Do we really want to exploit poor people so that we can pay a small amount less?
Labor costs are the biggest drivers in most businesses, especially retail. Workers demand that wage differentials between the more skilled and the less skilled be maintained thus a rise in the minimum wage causes a general rise in wages across the board and subsequent large increases in prices.
Higher wages also drives a push toward automation and thus less employment. For example, over the years the UAW has lost thousands of jobs to robots and unfortunately the only real growth industry is government.
For example, according to the Commonwealth Foundation, PA student enrollment since 2000 has dramatically decreased by 35,510, but the number of staff employed by public schools increased by 35,821. If you believe labor costs are small, look at your property tax bill.
EDITOR: Unionized minors were receiving an extravagantly high rate of pay, the highest of any industry. This has little if anything to do with minimum wage. They still do. Much of the industry now is strip mining which requires very few workers.
Perhaps a better example? My grandparents were copper and coal miners. Given the skill involved and the danger (check the death statistics), I would not call their pay extravagant. Some doormen in NYC make more.