Comment Re:Government mandated minimum wage increase do co (Score 1) 140
I think you're missing that those 1.4M people are needed, but they're no longer affordable at $15/hr. In theory.
What the GP is missing is that increasing the buying power of people in the area can boost local businesses.
Take the mom 'n' pop business down the road:
- 100 consumers in the local area that will visit the store.
- Sell widget for $5.
- Pay 5 employees $290/wk (probably reasonable coverage for a store)
- Consumers want the widget every other day, but have to save (for example) 1 week of pay to buy that widget and still cover other expenses.
- Business makes $5000 per week. Business spends $1450 in payroll.
- $3550 for the business after payroll and before cost.
- 100 consumers in the local area that will visit the store daily.
- Sell widget for $5.
- Pay 5 employees $600/wk (that's $15/hr, 40hr/wk)
- Consumers want the widget every other day, and can buy the widget every other day without worrying if they'll have to eat ramen noodles for the next week.
- Business makes $17500 per week. Business spends $3000 in payroll.
- $14500 for the business after payroll and before cost.
- Businesses makes more money, even though they're paying their workers more???
- Businesses can spend more with suppliers/distributors, passing that money further up the chain.
The whole thing is oversimplified, and assumes everyone in the area is paying that $15/hr of course. And keep in mind that $15/hr means $310 extra in the pocket per week - that's enough for each one of those 100 consumers to buy 62 widgets per week if they really wanted to, and they can maintain their other expenses (assuming they were able to in the first place.).
I've been sitting here thinking, and I don't see where - if anywhere - the whole thing breaks down either. Until someone gets greedy and says "I want me a bigger cut of this" and doubles their prices - which leaves everyone except for whoever doubled the prices in the same place they were in the first place.
Which is of course where it'll break down, because publicly traded companies are assholes that do everything in their power to make more money.