I have no idea why they needed to do a study to determine that if you raise the minimum wage to $15 inflation would set in. Of course, if it costs you a lot more to manufacture a product, you are going to raise your prices to cover the extra investment.
What’s next? A study that finds if you fall in a pool, you will get wet? The fact of the matter is that raising the minimum wage to $15 an hour is in many ways, counterproductive.
The CBO (Congressional Budget Office) has determined that raising the minimum wage to $15 would cost the economy 1.3 million jobs. Many believe that number is low. Additionally, the inflation caused by raising the cost of all goods and services could wipe out all gains from the increase. Making $25 an hour does not do you much good if the bread is $60 a loaf.
Young kids and entry-level workers will be hurt the worst because not only can’t you get a job because your work wouldn’t merit it but your prospects will remain dim because you have no chance to get the experience you need to find work.
It is a Catch 22 situation.
Companies will also invest in technology since in the long run, it’s cheaper than paying workers more than their experience warrants.
The restaurant industry is the one area that is most affected by the $15 minimum wage because now, tips are considered part of your salary.
Under the $15 minimum wage, you must pay $15 an hour plus they get tips. I would never be able to tip in a restaurant or anywhere else for that matter. My tip money would be spent on the skyrocketing prices.
But if the government forces businesses to increase their wages, Princeton economist Orley C. Ashenfelter and Czech economist Štěpán Jurajda found through studying price and wage data from nearly every McDonald’s restaurant in the U.S., businesses themselves do not cover the cost of increased wages.
Instead, they found that businesses simply pass that cost on to consumers.
“Our data imply that McDonald’s restaurants pass through the higher costs of minimum wage increases in the form of higher prices of the Big Mac sandwich,” the researchers said.
