[shingen]

The same threshold applies whether at the federal or state level in terms of the consequences. Push it too far at the federal level and you'll wipe out a row of cheap labor jobs, that will either be automated or off-shored; and those that can't be either will result in consumer price increases (which just burdens primarily the poor and middle class).

If you want to incentivize with $20 / hour minimum wage, you'd have to mandate hiring, or change the laws governing firing employees. Businesses would rebel against it immediately otherwise.

Bill Clinton & the Republicans worked together in the mid 1990s to successfully overhaul the existing welfare system by altering the terms of how you could get welfare and for how long and so on. Prior to that, the system was largely resulting in a stagnant perpetual welfare cycle, where people went in and never came out. It seemed to work great right up until the big economic implosion of the last few years.

[ajays]

I disagree that you would have to mandate hiring. The local Walgreens needs 5 people to man the store. Do you think they'll just close up shop? Of course not. They'll have to pay more to their employees, and we (the customers) will have to pay an additional, say, 5%.

As for the welfare reform: people route around obstacles. I think people have been able to game the current system too. "Disability" is one such option; claim a physical disability, and get $1000/month in disability payments (or that's what I've heard). Earned Income Credit is another such option.

My basic point is: just like in any learning algorithm, we need a gradient that will drive people in the right direction. The larger the gradient, the faster the movement. :)

[yummyfajitas]

Do you think they'll just close up shop? Of course not.

Some stores on the margin will be driven bankrupt by the increased costs, and these stores will close up shop.

[ajays]

But every store in that business would see their labor costs rise proportionately, so the net effect would be zero. If Walgreens' costs go up by 5%, so will Rite Aid's, CVS's, etc. Stores will just pass on the costs to the consumers. Plus, the labor cost of stores like Walgreens are very small compared to the merchandise costs. And the high-paying jobs (Pharmacists, etc.) would not be affected anyways, since you're just raising the minimum wage.

Other than Walmart, you'd be hard-pressed to find a business where the minimum-wage employees are a significant cost item in the budget.

[philwelch]

> Stores will just pass on the costs to the consumers.

Which just eats up the increase in minimum wage.

[glhaynes]

To some extent, yes - but to what extent? Surely not entirely.

Does anybody have numbers on this sort of thing? Because if we just assume the cost is passed on to {all consumers}, much of it would be eaten up by non-minimum wage-earners, the majority of the workforce (and thus the majority of consumers).

And much of those costs may also be passed on to products that aren't generally bought by minimum-wage earners, too.

[philwelch]

But raising the minimum wage would affect the entire wage structure the whole way up, and $20/hr is enough to eat up lots of more-than-minimum-wage jobs as well.

[orangecat]

Stores will just pass on the costs to the consumers.

Which just shows that the minimum wage is a convoluted and inefficient form of welfare. If you want to help poor people, give them money. The end.