Generally when people think about raising the minimum wage they think about the amount of money more that there will be had and the benefit there will be to the poor people. Well unfortunately - as pointed out by Art Carden (Economics professor at Rhodes College) - almost every time the government enacts an economic policy, that policy actually hurts the people it was meant to help.
Let's look at an example. Imagine you are a manager at McDonald's and have to higher someone (let's say the wage you are willing to pay them is $6.00/hr). The first candidate is Tad Williford Vanderbilt who is educated, clean, and an all around well-rounded individual. Then you have crack-head Carl. Crack-head Carl was addicted to crack, but then he went through rehab and now he needs a job. Carl is willing to barter with the you over the rate at which he is hired (maybe he'll work for free the first week to show you he's trustworthy or work for less than $6.00 for a while).
But then the government steps in and says, "Thou shalt not pay they workers less than $7.25 an hour." Which candidate would you choose? I would go for Tad because now that is the only legal way that I can be sure I am getting a reliable worker. So now crack-head Carl and any other people like him loss their job opportunities with little room for change. Because Carl's work (or productivity) is not worth $7.25, people won't hire him for that amount and can't hire him for less.
At $7.25/hr, more people are willing to work than at $6/hr. Makes sense, right? The quantity demanded for those jobs goes up. But because producers have to pay more than they would originally they have to redistribute their costs and can't hire people as many people.
Not everyone is hurt by minimum wage increases - people like Tad seem better off.
Minimum wage increases do hurt everybody. First the companies have to raise the prices on everything because they are paying their employees more money. Then as the price of everything goes up, the standard of living either stays the same or gets worse. Minimum wage is a bad idea and every time we raise it we're hurting our economy.
Well, it seems I made a misunderstanding of my wording. It may not hurt everybody, but I failed to mention that it doesn't help either. Tad may seem better off, but he is only on par. You're right.
Ah, ok. I see.
But still, minimum wage has screwed with our economy and whenever we hike up the minimum wage it screws the economy and we lose jobs because of the raises in everything. It usually settles out eventually, but in the beginnings of a recession it only makes them worse which we're seeing now.
so this semester im taking macroeconomics...and well lets say thats not really my subject...im more of a psychology freak.....but when you put it that way, now i actually understand what my professor was trying to say about min. wage...lol thanks.