In our area minimum wage is paid a lot to the agricultural workers and to people in shops around town. It would be a big economic boost to our area. We are not a part of the country where the businesses and farmers willingly pay a lot over minimum wage.
How do you figure this? I don't see how this increases to total amount of cash in circulation.
(And that doesn't even get into whether or not there is an inflationary impact.)
Because all of the minimum wage earners in our area will get a boost of 2.00 or so an hour. That is an increase of about 35-40%. Since so many workers here make minimum wage that will be a big boost in our area.
It looks rather obvious to me, please let me know if I am missing something you are trying to point out.
Gary already answered this one, but I will expand.
My father-in-law is CEO and president of a company (I work there). The company exists to help people, but has to make money to survive (just like everyone and every other business in the WORLD).
So whenever we hire someone else, or someone gets a raise, we have to find a way to pay for it. That means cutting expenses or raises prices. If we cut expenses, that means that another company (paper, power, computer, whatever, takes a cut). But If we raise prices, the consumer takes a hit (a cut).
So if you (spurly) and I own a grocery store and suddenly have to pay our employees more because the government says so (instead of the market naturally causing it to happen), we have to make up for the added expense in some way. So we mark up the food. That means that the people who just got the raise are paying for their own raise when they buy food--and so is everyone else.
The market naturally calls for raises and more income for work/skills that are in demand. For example, if I decide that I hate what I do for a living and that I want to massage people for $100 dollars an hour BUT I'm not that good and no one wants to pay me that much, then I don't get paid that much. So the market would naturally force me to be a contributing part of the market by doing something that people are willing to pay more for.
But if the government said that it wasn't fair that I couldn't make enough money doing what I want to do and demanded that everyone pay me $100 dollars for a massage.....well, you see how that's just not right. That's not a republic or a democracy. It's even beyond communism and socialism. It's stupid.
Here's a tried and true economic principle: If one part of the economy is forced to pay more, the other part will be forced to pay more.
EXAMPLE: If I have to pay more for my fruit (or other expenses), I have to charge more for my fruit.
If I charge more for my fruit, the consumers will pay more.
If the consumers pay more, they are able to spend less on other products.
If they spend less on other products, the other company is taking a cut.
If they take a cut, they have to find a way to make up for it and......................We are full circle and then some.