$7.00 Minimum Wage????

[Fmr. Gov. NickG]

We should absolutely increase the minimum wage, preferably to about $10/hour.  Increasing the minimum wage has a only very minor effects on overall unemployment.  And any specific business that cannot afford to pay their employees more than slave wages should not be in business in the first place.

Although I think we should make exceptions for a very small number of industries that only hire teenagers or other people who do not have to be self-dependent.

[Fmr. Gov. NickG]

Raising the minimum raise to $7.00 would be an economic disaster. Small businesses would go out of business, and larger companies would have to lay people off. You can't pay as many people at $7.00 an hour as at $5.15 an hour. Unemployment and prices would go up. If you don't believe that, think about what NewFederalist wrote. Why don't you raise it to $10. Then $20. $30? $50? No. It would destroy the ecomony. Raising the minimum wage won't help. Also, people working at minimum wage are mostly teenagers and young adults. Those are starting level jobs, not careers.

If a business is only willing to pay its worker $5.15 and these workers are not teenagers or people who don't have to support themselves (e.g. disabled), then that business is exploiting the desperation of the working poor and deserves to go out of business.   It seems like when many people here refer to "small business" they basically mean "business that can't operate efficiently".  
 
Also, our country would be much better off if we weren't coddled by the low consumer prices having a perpetual underclass makes possible.  Raising the minimum wage might slightly raise these prices, but it wouldn't raise unemployment.   It may put some inefficient firms out of business, but it will strengthen those firms that operate efficiently, enabling them to hire more people.

[Fmr. Gov. NickG]

I would support a modest increase in the minimum wage, $5.35 or so.  

An increase to $7 would work, but it needs to be done gradually, not all at once.

I agree that the minimim wage should not be increased all at once...and I think the serious proposals to increase it do it over two or three years.  I think it should be raised about $1/year for the next 4-5 years.

[Fmr. Gov. NickG]

Eh, I don't understand why people insist on promoting policies that result in putting small businesses out of business.

Everyone who is arguing this isn't addressing why firms should be encouraged to stay in business if they are paying their workers desperation level wages.

Certainly the abolition of slavery put some plantation owners "out of business", but I don't feel sorry for them.  

If a company can't treat their workers with the basic human dignity of a living wage, then that company should not have a place in the economy of such an affluent society.

Also, every economic report you hear touts the huge increases in the productivity of workers.  If workers have become so productive, why aren't they being paid more?  All the economic benefits of productivity are just going to corporate profits and consumer prices, not to the workers where they belong.

[Fmr. Gov. NickG]

NickG,

Raising the minimum wage doesn't ensure that someone who is more productive than 10 years ago and is paid $10 per hour gets their fair share of money.

Most of those productivity gains are not the result of workers, either.  Its automation, which is funded and driven by management.

I don't mean to suggest that raising the minimum wage would solve the problem of the distribution of productivity profits for those already making a middle class wage.

And yes, productivity gains are driven by automation.  But that doesn't change the fact that companies should now people able to afford to pay their workers more because they are able to get more work out of each worker.

Thirty or forty years ago, "small businesses" could afford to pay their workers to equivalent of $8/hour, because that was the minimum wage at the time.   Now, even after the productivity of those workers has increased over time (and it has, even for unskilled workers), you are saying that these same businesses would go bankrupt paying their workers more than $5.15?  I don't understand why this would be, except for some sort of "iron law of wages" idea that I would hope such an affluent society had gotten past a century ago.