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WILL THE NEW MINIMUM WAGE RATE INCREASE LAYOFFS???

 
refugee13
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User ID: 729390
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07/24/2009 02:25 PM
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WILL THE NEW MINIMUM WAGE RATE INCREASE LAYOFFS???
[link to www.dailyfinance.com]


The new minimum wage: Will it just increase layoffs?
Douglas McIntyre
Jul 24th 2009 at 8:30AMText



Big financial events bring economists and analysts out of the wood work, anxious to give their opinions and get their names in the media. The increase in the minimum wage, which is effective today, is a prime example. The federal minimum wage will go from $6.55 to $7.25. That is an 11 percent hike, which is a pretty healthy bump.

Some states already have minimum wages above $6.55, so workers in those state will get a smaller benefit. The national increase is a big enough jump that some small businesses may not be able to handle the increased expenses. And some large businesses with a lot of low-end workers could use the increase as an excuse to cut more workers.

So, does the hike in the minimum wage bring in more tax revenue because more people are making more money? Or does it cause more layoffs, which effectively shrinks that tax base? The same can be asked about consumer spending: Will it rise because people are making more money, or drop as minimum-wage earners are let go?
The effect on employment is likely to be negative because of the combined impacts of the increase in wages and a lack of availability of credit. If the federal government wanted to lessen the strain of a wage increase on small businesses, it should have made provisions for tax breaks for firms with payroll below a certain level or created a way for these firms to get access to capital in an environment when banks are unlikely to lend money, particularly to operations that are small and risky.

Hiking the minimum wage might have had a small effect on the economy if it had been combined with other programs. As it is, the move will cause a lot of layoffs.
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Anonymous Coward
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07/24/2009 02:28 PM
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Re: WILL THE NEW MINIMUM WAGE RATE INCREASE LAYOFFS???
One of two things or BOTH - fucking increase layoffs as it cust into profi margin, or increase cost of goods and services to consumers, who may not pay the increase thus pushing the company down through less sales - result = layoffs...
Anonymous Coward
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07/24/2009 02:30 PM
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Re: WILL THE NEW MINIMUM WAGE RATE INCREASE LAYOFFS???
I sure hope not, as it is there are not enough checkers at the grocery stores now and I don't use those self-check isles.
refugee13 (OP)

User ID: 729390
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07/24/2009 02:30 PM
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Re: WILL THE NEW MINIMUM WAGE RATE INCREASE LAYOFFS???
One of two things or BOTH - fucking increase layoffs as it cust into profi margin, or increase cost of goods and services to consumers, who may not pay the increase thus pushing the company down through less sales - result = layoffs...
 Quoting: Anonymous Coward 692625

there you go...
"Livin' The Dream..."

"Don't believe in anyone, 'cos they'll feel you so much more"

"So break me down if it makes you feel right~and hate me now if it keeps you alright~you can't break me down if it takes all your might~cause I'm so much more than meets the eye..."

"Some people would bitch if their ice cream was cold..."

Anonymous Coward
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07/24/2009 02:30 PM
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Re: WILL THE NEW MINIMUM WAGE RATE INCREASE LAYOFFS???
for some will reduce hours worked.
refugee13 (OP)

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07/24/2009 02:33 PM
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Re: WILL THE NEW MINIMUM WAGE RATE INCREASE LAYOFFS???
for some will reduce hours worked.
 Quoting: Anonymous Coward 733719

maybe even from full time to part time status, they could lose any benefits they had, not to mention unemployment possibility...
"Livin' The Dream..."

"Don't believe in anyone, 'cos they'll feel you so much more"

"So break me down if it makes you feel right~and hate me now if it keeps you alright~you can't break me down if it takes all your might~cause I'm so much more than meets the eye..."

"Some people would bitch if their ice cream was cold..."


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