When you raise the minimum wage, a lot of things are bound to happen, to different degrees.
- Costs go up
- Profits go down
- Fewer people get hired
- People get hired for fewer hours
- People make more money
- People buy more stuff
- Tax revenue goes up
- Welfare payments go down
- People save more
- People have been priced out of the market and can't get a job
- Companies invest more in automation, leading to permanent job loss
- Workers improve their skills because the low-skilled jobs are gone
- Prices go up
- Purchasing power goes down
- People buy less
- People buy from companies not affected by the increase in minimum wage
- Companies move to locations with lower minimum wage
- People move to the area with higher minimum wage
These are all entirely predictable consequences of raising the minimum wage. There's probably several I've forgotten about.
All are bound to happen for some people.
Which end up dominating is the big question.
Will people overall be better off? Or will people just have to run faster and companies hire less?
I don't have the answer. I don't think anyone else does. There's been studies done, and as far as I know they're not conclusive.
With systems as complex as these, I'd love to see us explore other ways to help people make more money.
How can we teach people to be worth more to employers? To be better workers, bring in more business, make things more efficient, acquire new skills, increase their self-esteem, be better at customer service. There are countless ways to increase your worth to a business, and those can all be translated into higher wages for the workers.
I'd start there.