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Politics : American Presidential Politics and foreign affairs
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To: Peter Dierks who wrote (68712)1/18/2014 7:26:39 PM
From: TimF  Read Replies (1) of 71588
 
One thing about minimum wage increases is that unless they are huge, they won't necessarily cause a lot of people to get fired, at least not right away. The negative impact isn't necessarily quick. Except for businesses which are right on the margin, they won't want to go out of business, and often won't be easily able to get by with a lot fewer employees in the short term (or in many cases they would have fired them already or never hired them.) But over time they invest in labor saving equipment, or they hire more skilled and productive people (still leaving someone employed but causing the low skilled employee to be fired, or perhaps two of them, since the more skilled employee can be more productive and the low skilled employees are no longer cheaper), or the business doesn't expand and thus doesn't hire more people.

So depending on the size of the increase, the relation of the resultant wage to the market rate for low skilled employees, and the general economic conditions, you might not get much extra unemployment right after the increase, and people who support such increases can ignore the longer term effects or try to explain them away as being due to other factors (and there are always other factors, so it isn't simple to prove them wrong).
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