I read elsewhere that unions are huge supporters of the minimum wage increase many union contracts tie union pay to the minimum wage. So a minimum-wage increase will automatically increase the wages of lots of union workers.

Which sounds great, if you assume that companies have that money. In fact, at the same time that union bosses are taking credit for getting their workers a raise, the companies will be planning layoffs, in order to get their labor costs back under control.

The solution isn't higher wages, but lower prices. Yet the Fed keeps saying deflation is the enemy we need to fight against, and pumps more money into the system to increase prices.

There's no limit on who can be replaced: San Francisco-based Momentum Machines has a burger-flipping robot that replaces three full-time kitchen staff, makes no wage demands and stages no walkouts.

Expect protesters at Moementum Machines headquarters before too long.

But I think we can file this whole thing under "What did you think was gonna happen?" Moreover, we've been through all this before.

If you think the minimum wage is a good idea, think again.
Whenever a hike is mentioned, pundits actually ask a very good question: Why not make it $20 an hour?
Have you answered that? Because that's only a matter of degree. It's logical to ask that.
The fact of the matter is that there is an effect on cost that is invisible unless you know how the market for labor works. When you hike the minimum wage, you hike the cost of everything and you devalue the dollar for real. This is because there is no change in the amount of work obtained for more dollars!

Remember asking when you would ever use algebra in the real world? Remember applauding some comedian's appeal to ignorance about this? Well, here you go: what happens when you add the same amount everywhere? Yes, when you hike everyone's pay, nobody is better off. They just feel that way momentarily because they see a bigger number on ther paycheck.
Go look on the shelf at the supermarket, at the gas pump, in a jeweler's cabinet and see what you're supporting by way of price hikes. It's not "them" - it was you, supporting minimum wage. The entire reason illegal immigrants are here and textile jobs are overseas.

On my last trip on American, I checked a bag, for which I was charged $25. I checked in myself and the machine printed out the bag tag, which I then attached myself and took up to the agent. I was surprised they didn't make me vault over the check-in counter to set the bag on the conveyor belt myself.

The minimum wage was never intended to support a family. It was to give a newbie to the market a base to work from.

Most companies will pay more if they can't get the employees at the minimum wage. Look at Wal-Marts in North Dakota. They're paying $17 an hour.

And what right does the government have to say what an employer has to pay an employee?

The other thing is that in this economy, would you hire a pimply-faced youth or the person with training and education who's been un(der)employed the last 5 years?

Of course the other thing is that for every 10% increase in minimum wage results in a 1% reduction in minimum wage jobs. So expect 10s of thousands of jobs to simply disappear. And if you have them work for more than 29 hours/week, you'll have to buy them health insurance or pay a $2,000/employee penalty.

Wait...why would anyone want to expand their business? yes, automation becomes more attractive, because of the wage, but it becomes a lot more attractive because it doesn't need health care insurance.

Not to mention the inherently inflationary aspect. Suddenly my wages don't go as far. And while it may be a while - a year, or two - before I get a bump, I will get a bump. And so will everyone above the minimum wage employee. And so in about 5 years...they're still in a hole because everything they need will be more expensive.

Here in LA, you can get any job done by a guy standing in front of Home Depot for about $5.00 an hour. Teens don't get jobs, guys from Oaxaca do. If you're trying to raise a family on a minimum wage job, you have bigger issues than just the money.

I know, from my days as a low-wage food service worker, that the minimum wage going up can be a morale crusher. Consider the person working in a low-wage job who has busted his or her ass for several years to get a measly raises and promotions and is now making $1.50 over the starting wage. Now the minimum wage goes up by $3. Our dedicated worker is now back to making minimum wage, the same wage made by the slacker who comes to work stoned every day. "Why did I work so hard?"

[About a proposed bill raising the minimum wage to $10.10] "...will give businesses customers with more money to spend." ~ Barack Obama, State of the Union speech, 2014

And another graduate from the Magic Money Tree School of Economics joins the government.

Raising the minimum wage will give business customers with more money to spend? And where will this money come from?

When prices go up to cover the new, higher wage, customers will have effectively the same amount of money (or even less) to spend.

And fewer of them will be employed as companies find that automation will cost them less overall than hiring people at $10.10 an hour - plus the attendant liability risks, unemployment insurance, benefits, social security withholding, and tax accounting.

If you want to put people to work, make it cheaper to employ them than to purchase and deploy the Burger Flipper 2000.

And stop telling people it's Walmart's fault they make minimum wage. Tell them if they want to make more than minimum wage, they need to get a marketable skill set.

Which Wal-Mart are we talking about too? Other than very rural and poor performing Wal-Marts, the starting wage is generally over minimum wage (not much granted, but it is more).

And fewer of them will be employed as companies find that automation will cost them less overall than hiring people at $10.10 an hour - plus the attendant liability risks, unemployment insurance, benefits, social security withholding, and tax accounting.

Plus hiring a third party company to preform maintenance on the equipment is an expense to be counted against your profits at tax time that salary is not

You all are mostly correct but are forgetting one thing. Items manufactured over seas and imported are largely unaffected so for those things buying power is increased.

Consider that new TV. Most the cost is in materials and production which is done overseas (probably China) which is not affected by the minimum wage. Sure the dock workers here in the US and the truck drivers and sales staff cost might go up a little. So instead of $1000 it is $1020. Not much of a change...unlike your fast food meal that just went for $8 to $10.

Of course production may move offshore if feasible.

I read a year ago or so about a company bring production back to the US. The owner was quoted as saying that they discovered with automation it was cheaper in the US than were it had been done. The county had been all excited because they thought they would have thousands of new jobs...and it turned out to be about 50.

So instead of $1000 it is $1020. Not much of a change...unlike your fast food meal that just went for $8 to $10. -- The Former Banker at January 30, 2014 12:51 PM

You are probably right on the durable commodity items.

But the problem with the argument is that the rise of the minimum wage doesn't just effect clerk/cook/server at Barfer King or Long Dong Silvers.

It effects the whole chain. So John Doe at Jim Bob's chicken slaughter house will have to raise the wages of the person making breaded chicken breasts. Or the fileter at Jack Sparrow's fish processing plant. The legal produce producers will have to increase the tomato pickers wages as well.

And then there is the automation factor. Way back in the 80's I had a fall job of picking potatoes that I was riding a bike 7 miles each way to "pick" potatoes that had been turned out of the ground and then was paid by the basket.

Since then they have automated the picker machine so the migrants that replaced us no longer have a late fall job.

So if the Barfer King Whopper going to $3 a piece doesn't cause you alarm, just consider how much of the chain will get fucked

a rush to automate.

Yep, 2 of my 3 local supermarkets have already done this.

The one has 6 self checkouts staffed by 2 people. This means a lot less cashiers are needed overall. So a lot of money is being saved by employing less people.

Forcing companies to increase salaries will cause them to look for cheaper alternatives.

For whatever is it worth, the 2 supermarkets with the self checkouts are known for having strong unions (you must join the union to work there).

The store without the self checkout hires a lot of high school and college students part-time. I'm not sure what their union policies are.

They also have a lot of The ARC (formerly The National Association of Retarded Citizens) folks working as bagboys, etc. Force that company to pay a "living wage" and a lot of The ARC folks might be out of a job.

I R A: "Not to mention the inherently inflationary aspect. Suddenly my wages don't go as far."

When I was 16 I worked at a gas station for the minimum wage of $1.65 an hour. Regular gasoline fluctuated between 23 and 28 cents a gallon. Today the minimum wage in this state is $9.19 an hour and the regular gas I bought today was $3.29 a gallon.

Today's minimum wage is more than five times higher and buys less than half as much gas.

But... the 127 year old silver dollar in my pocket was worth worth about eight gallons of gas when I was 16, and it's still worth about eight gallons today.

It effects the whole chain. So John Doe at Jim Bob's chicken slaughter house will have to raise the wages of the person making breaded chicken breasts. Or the fileter at Jack Sparrow's fish processing plant. The legal produce producers will have to increase the tomato pickers wages as well. ~ Posted by: Jim P. at January 30, 2014 8:50 PM

And because those fish fillets, breaded chickens, and tomatoes will have to be priced higher, the folks that were making a "living" wage will find their dollars don't go as far as they used to. They'll be buying less and putting off major purchases in an effort to stretch what was once a pretty good paycheck.

Microsoft co-founder Bill Gates made the connection in a recent interview on MSNBC. Asked if he supported a higher minimum wage, Mr. Gates urged caution and said the policy would create an incentive for employers to "buy machines and automate things."

I don't doubt that it would create an incentive. But I think the incentive would just accelerate something that is going to happen anyway.

The entire Obama administration agenda for the last five years has been to spend as recklessly as possible in order to stoke the inflation engine.

Green energy, GM bailout, hiking the minimum wage. All necessary to inflate our way out of the housing crisis followed by the lending crisis.

The only ones that ultimately get screwed are those in the middle class who have actually saved their money in the hope of someday being able to retire. This means "me" and possibly you too.

It's not automation. It's not about "a living wage". It's not about what Bill Gates thinks.

Put this somewhere you can see it:
Raising the minimum wage devalues the dollar.

This is because there is no way to change the unit, "one hour of work". When the agency which issues the dollar makes you spend more of them for that hour of work, the dollar is devalued.
Immediately.