Fast Talk

Well The National Federation of Independent Business, a lobbying group, isn't happy about the minimum-wage increase. Paying employees more money forces businesses to pass on higher prices to consumers, according to the group ( The Wall Street Journal, 08/05, http://www.smartbrief.com/news/nfib/storyDetails.jsp?issueid=C50C18EB-D4... ). Their unhappiness is understandable but also uncomfortable. Businesses realize that we are in a tight economy right now and that consumers are not spending like they used to, therefore the last thing they want to do is give consumers another reason to not patronize their company. So the answer to the question is no and that's the problem businesses are running into. Raise prices now and customers will look elsewhere, more so now then ever before, and you may never get them back - even when the economy gets better. Don't raise prices and you are cutting into your revenues and profits even more. That's a very tight spot to be in. I don't think they are going to pass those higher cost to customers now but they are waiting for the moment they can.

Absolutely. I don't think there's any question. It will also cause other businesses to go under. But, depending on other incentives, it may help some businesses get established.

In a traditional economy, most certainly a tempting and likely scenario...however, federal or other incorporated regulations on the practices of private enterprise should weigh and provide an equitable distribution of value to both consumers and services. The measure of a living wage should be a universal determinate for wages and true production cost x some factor of demand determine the consumer tag.

of course it will, and not only that it will hurt those it is meant to protect. Hours will dry up and workers will be left with less money in their pocket then when they started ... ahhhh unintended consequences.

Not likely, since the vast majority of businesses pay more than the minimum wage already. The local Hardees pays $9/hour....

eventually employers will have to pass it on to their customers or lay people off; especially small business whose margins are thin.

Yes. Everything is passed on to the consumer.

Simple supply and demand. Draw an S&D curve. Now draw a price floor, a horizontal line over the natural intersection. Presto, you have a shortage. Supply of workers as seen at the intersection of the new floor and the Supply curve drawn down to the x Axis (quantity) vs, Demand for labor as seen as the intersection of the new floor and Demand and drawn down to the x Axis (quantity) and that's the number of people you put out of a job.

Artifically hold price to high and you have a surplus, in this case, workers that are willing and able to work for the lower 'market' rate but unable to get a job.

Artificially hold price to low and you have a shortage, as seen in the 70's with Carter's price fixing. Not enough supply to meet the demand, i.e. long lines at the pump.

Bottom line, mess with free market economics and there are side effects. To answer the question - of course this impacts Americans. If prices do not increase, jobs decrease and less Americans work. If prices do increase Americans can keep working but the customer pays higher prices for cheaper commodities and this mostly impacts the lower income people you are trying to help. (Makes for a great 30 second sound bite though.)

Only 10% of people on Minimum wage are head-of-household. So while we 'feel' that we are helping people with such price fixing we are really helping 10% and hurting 90%. More money for those in need 10%, less jobs for everyone else 90%.

The truth is always multiple layers deep.

Agreed...it will not have an effect. Even in rural ND we pay about 8 starting or $7 if they are tipped staff at our pizza place.

Hmmm, let me take out my graph paper and sharpen my pencil. I am now drawing a reality curve, which measures the irrelevancy level of the federal minimum wage in most areas of the country. Next I plot out a curve measuring the success level of eight years of Reaganomics Redux to see where they intersect. Oops, they don't. I would add a ceiling measuring CEO pay of these poor companies forced to pay the workers flipping the burgers and foaming the lattes poverty wages however my paper is only 11 inches tall.