OK, just for the record - I’m not a democrat, I’m not a republican - I am an American. I do tend to be a more conservative type of person but I don’t like to be put in a group. That said, I think the minimum wage increase is a bad idea. All I can see the increase in minimum wage accomplishing long term (3 years) is pushing inflation up 40%, causing US goods and services prices to increase, and further weakening the dollar against other foreign currencies.Â
Prices are set at what people can afford. When people can afford more, prices go up. This is called inflation. When the minimum wage workers can start affording more things, the prices just go up. I guess the government doesn’t realize that changing the minimum wage will not change the standard of living. Â
US goods and services will also increase.  If business now have to pay their workers an extra 40%, in order to keep the same profits, their prices will also go up 40%.  What this does is hurts anyone but those the raise affects because they didn’t get a 40% raise but their costs went up 40%.  It’s like everyone who makes above 7.25 will be getting a 40% pay cut.  Ouch!
Weakening the dollar? That one’s easy. If our money is 40% less valuable in the US, what do you think it will be worth outside the US?
OK, I can see how people can think that giving the lowest paid people in this country a boost in their paycheck may be a good idea and a nice thing to do, but I think it is very short-sighted.  I think to make a better contribution, the best thing to do is to raise the standard of living for all.  Heck, you could give free healthcare, charge everyone a 40% tax (end result is the same) but it would actually cause inflation to decrease and strengthen our dollar.  Don’t get me wrong, you’ll see another angry post if someone gets the bright idea of instating a 40% tax, but you get the idea.
11
Jan
07
There are other hidden costs as well (FICA). So really the cost to an employer who goes from 5.15 to 7.25 an hour is an increase to the employer of $2.26 an hour, or about 44%.
First off, everybody won’t get a 40% increase. Only those making minimum wage today will. You and I will be lucky to get a 5% raise. So our standard of living will go down as a result of this.
Which is also what Congress wants. You’re rich by their standards. You own a home and earn more than what they consider “middle class.” The fact that their threshhold for “middle class” is barely above poverty levels for New Jersey and your household income comes from two wage earners means nothing to them. You’re rich, therefore evil, therefore need to be punished.
The goal of socialism is to make everybody equal, and the only way to do that is to make everybody equally poor and miserable.
Now go figure out how the small business who employs min wagers that has been booming throughout the thriving economy will be able to take the hit and afford the increase. I too think that this is a bad idea and agree with your points.
In response to David C:
5%?! Last year I got a 4 out 5 on my yearly review (better than average) and I managed a whopping 2.8% raise. Yes, less than inflation - so I actually lost money. I tell you what, I got the same rating this year and if the raise isn’t at least 5%, I can’t afford to not get a new job.