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On Apr 27, 9:49 pm, "Ed Huntress" wrote:

Well, it has little effect on the overall economy. It has somewhat more
effect on some people to whom it applies.



It's not something that I've spent much time looking into, but I think its
effect today doesn't amount to much, except, again, for the relatively
small
group of people who are living on it.

--
Ed Huntress

And for the relatively small group of people who are not working
because of it. So it balances out. Black teenagers do not get a job
and learn skills. Others earn slightly more because of it. Monica
can not work for free and show she has the talent for a high paying
job.

Dan

I'm not going to argue with that, and you seem to have a good sense of the
situation, but there's one more point here, one that I've never looked into
deeply but with which I have some personal, anecdotal experience.

Most jobs that pay minumum wage are jobs in small businesses. By far the
largest proportion of them is in the food-services industry, especially
independent restaurants, etc. The average age of someone making minimum wage
in California, for example, is 33 years. Minimum-wage workers also reflect a
sizeable number of teenagers, and they are disproportionally women.

In most small businesses, those workers are essential to doing business.
They're a "fixed resource requirement." Thus, in California businesses
overall, an increase in the minimum wage 5 years ago is claimed to have
raised their costs by 0.7%. But in food services, it was 2.7%.

So you can see that increasing a minimum wage does effect a small increase
in costs among the kinds of businesses that have the largest proportion of
such workers. They need those workers, and the number of workers they hire
is largely inflexible in regard to wages.

I haven't ever investigated the numbers more than that, but the point is
that where people have few opportunities to work for higher wages, increases
in the minimum wage provide the greatest benefit to workers. The other side
of that coin, as you point out, is that larger businesses that hire some
workers at minimum wage will hire fewer workers, because they *do* tend to
have some flexibility regarding the number of workers they have, and they're
playing the game on a cost/benefit basis.

Those are the places where increasing minimum wage can hurt workers, by
reducing the number of opportunities they have to work and learn skills that
will move them up the ladder. It's my strong suspicion, however, that there
are few of those jobs to begin with, because larger businesses tend to pay
more than minimum wage to start.

It's not a simple thing to sort out, and doing so would require a LOT of
research work. On the face of it, however, it's hard to believe that
increasing the minimum wage really reduces many opportunities for workers,
or potential workers.

--
Ed Huntress