Is raising the minimum wage enough?

[davidthegnome]

First, let me just say that I'm certainly in favor of it - earning even ten dollars an hour would be a great improvement for me. I've just been thinking about what the overall results will look like.

Naturally, employers and business owners will raise prices of products and services to compensate for having to pay their workers more. I don't know how much higher they'll raise them, but I'm expecting it will be enough to do more than compensate. So we have a little more money... and everything costs more. Gas, food, water, heat, housing, entertainment - the list goes on and on. Is enforcing strict price controls the solution? Is this even conceivable given the current State of Our Union?

If we do manage to raise the minimum wage to, say, 10.10 an hour, this will certainly be a process that takes time, likely years. So my thinking is that prices will go up before the minimum wage does, making life even more unaffordable for most of us.

The wage goes up - the working class pours all of that money back into the economy, while still barely getting by. Food stamps are cut, heating assistance goes the way of the dinosaur, unions and union jobs continue to disappear. A new trade deal passes - thousands of jobs are shipped to all places cheaper (primarily Countries like China and India).

Will it really make enough of a difference towards improving the lot of the working class? Particularly, the working poor? Or are people who work for Walmart and fast food joints still going to have to apply for food stamps and TANF - assistance programs which are constantly under attack by the right and even a significant number on the left?

I'm not an economist, my overall knowledge of economics is actually quite poor. So I was hoping that someone who knows more about this than I do might be able to offer some clarification. Am I imagining the worst case scenario? Is this just my paranoia? Or is the end result going to look kind of like a Band-Aid on a severed limb?

[Agnosticsherbet]

1. Raising the minimum wage is a beginning.

[aquart]

2. No. The extreme rich have to be massively taxed.

I favor 85% of gross income from all sources after the second billion.

[dumbcat]

3. If the employers and business owners will increase ...

... Their prices to compensate for paying higher wages, why don't they just increase their prices now without paying a higher wage? They would make more profit that way. What stops them from raising their prices now?

[davidthegnome]

6. Good question.

I don't know. As an example though - I work for a hotel, as a front desk clerk. The standard price of a room for the night (full sized bed, several amenities, etc.) is 115 plus tax. A few years ago, it was more like 80-90. So they already are raising prices somewhat, to compensate for the poorer business these last several years. At least the place I work for is raising them - there are precious few people, locally, who can afford these prices - as most of us who live in Northern Maine are quite poor.

What stops them from raising their prices now? Probably the fact that no one could afford to pay them. If the minimum wage goes up though, the assumption will be that people now have more money to spend, so increased prices will be more conceivable. I'm not saying with any certainty that this will happen, but I suspect and fear that it will.

Again, I'm no expert in economics, far from it. I'm just trying to wrap my mind around what we can accomplish, what good it will do, what the end result will be. The more I think about it, the more I suspect that the (financial) powers that be will find new ways to screw employees and consumers.

I guess what I'm trying to think up is some way in which we could prevent the worst case scenario/s from coming to be. Price controls, increased benefits, some kind of federal stipend to be available for those who are barely getting by - or not getting by. There's lots of ideas, I'm just trying to imagine one that might accomplish the goal of making life better, more affordable, for the majority.

Overall, I've got a lot more questions than answers.

[Duer 157099]

4. Your post demonstrates how these issues don't exist in a vacuum

To those who can't really process complex thought, they want to deal with just simple issues, one at a time, and not think about the larger picture.

Raising the min wage is ONE step in the process, but if done in a vacuum, it could actually backfire in the ways you describe.

The solution is much more complex, but unfortunately, we have simpletons running the show.

[pampango]

5. Certainly not enough. But then no one thing is 'enough'. We need a broad strategy with

many new policies on taxes, minimum wage, safety net, unions and others.

While we need all these policies, not just one or two of them, I won't oppose the first of them that is put forward.