Somebody benefits at the expense of workers getting poverty level
wages. Otherwise, it is hard to explain why the US Congress stopped raising the
minimum wage every year to offset increased living costs after 1976. Cost of
living formulas applied to social security pension benefits have been modified
several times in order to reduce cost of living increases. The burden of
taxation has shifted from rich to the poorer 90% of the population. Most income
gains during the current economic recovery go to the top 1%.
Businesses of all sizes can usually adjust to minimum wage increases
without serious problems. Restaurants typically pay a majority of workers the
minimum wage, to begin with, and never much more. They can offset the increase
with price increases, and generally do so because they are all under pressure
to do so. Workforce cuts can lead to lower quality service and loss of sales,
which doesn't deter some businesses from taking that tack, but it ends up
driving away more business than a price hike. Raising the minimum wage will
increase effective demand for consumer goods, housing, etc. because there will
be more money in the pockets of those who blow all their money on food, rent,
and dumb stuff like that.
Raising the minimum wage is a probably a win-win or at worst a break-even
proposition for all but one or two per cent of the population. But it is that
one or two percent of the population who might be harmed by a minimum wage
increase, and who have the money to buy politicians and get them elected. Poor
people don't matter so much because they don't contribute much money to
election campaigns. That is why the DFL pushed for a very timid minimum wage
increase state-wide, and why the mayor of Minneapolis is opposed to a higher
minimum wage via city ordinance.
Raising the minimum wage via local law can be defended as an equitable
measure consistent with state minimum wage and prevailing wage legislation
because of the effects of systemic racial discrimination, which pushes a large
part of the population in parts of Minneapolis into poverty, including
independent adults with or without dependent children. The stated purpose of
the minimum and prevailing wage laws is to ensure that workers with just one
full time job can earn enough to support a family, to provide adequate food,
shelter, medical care, etc. Fewer whites have to deal with extreme and
prolonged poverty than members of marginalized racial and ethic groups, such as
African Americans.
-Doug Mann, Folwell neighborhood