For instance, Aaronson, French (2006) is only the latest to show that minimum wage increases don’t have nearly the passthrough effect you think, even in the most MW-worker-dependent industries (i.e., fast food). They found that a 10 percent increase in the minimum wage led to an increase in fast-food prices of all of 0.7 percent. That’s a couple pennies a Big Mac. Even in MW-worker-dependent industries, labor is still a fraction of their overall costs.

Again I ask: If there’s even one micron of truth to all the scaremongering, why have none of your predictions come true for previous MW increases?

The EITC actually gives a boost to those who need it, and is much more efficient. It’s not perfect since lots of the poor work on a barter system – and they may not be filing taxes.

_The Undercover Economist_ has a few chapters on this. It’s a great read.

On the other hand, in the rural parts of this state, MW is not unusual for small shops. Again, fortunately, usually these are the wives of paper mill workers. But… when that mill goes out of business (a few have recently) people are trying to support a family on MW.

Two other cases I know of personally – relatives who were ill, and reduced from self-employment to MW jobs. Cancer can take you down hard.

There is one man that I personally know who has worked at a postion as a chef for a local resturant. He works harder than anyone I know, and makes wonderful food, yet he is only making 35 cents more than when he started working 6 years ago.

The problem is that many employers do pay only the mimmunim wage and nothing beyond that, and many of those same employers do not provide salary increases in any form. There are people who are trying to live on $5.15 an hour working 40 hours a week.

As to the arguement of the wage hike being a tax increase, yes taxes will increase somewhat, however someone making the minimmum wage and really within a dollar or two of it, will recieve 90% of their taxes back at the end of the year.

If I’m a full-time worker making $5.15 minimum wage, my annual income is $10,712. I’d pay $1,639 in SS/Medicare taxes — a net of $9,073 a year.

If the minimum wage is increased to $7.25, my annual income goes up to $15,080. The amount I pay in SS/Medicare goes up to $2,307. But I still very much come out ahead — my net increases to $12,773.

As for your “consider the extremes,” for heaven’s sake, can we all agree no one is talking about setting the minimum wage at $95 an hour? Eating one slice of bread is not the same as eating the total contents of 25 bakeries. Yes, Jack, if we had a minimum wage of $95/hr, there would be all sorts of negative effects. Now tell me how *any* of those Blade-Runner-esque effects would be caused by $7.25 — a rate that, remember, is still 25% *lower* in real dollars than the minimum wage 40 years ago.

On the other hand, I have no idea what planet you’re living on if you think eliminating the minimum wage would lead to the thousand-flowers-blooming you claim. The whole reason for having a minimum wage is that there is a group of workers who are, in effect, nearly powerless to negotiate higher salaries. They don’t have higher education; they don’t have unions; there aren’t better employers fighting over them. Do you think their employers are paying these people $5.15 because they decided that precise number was the fairest possible wage? Or do you think it’s because that’s the lowest they can legally pay — and that if they could pay $5 even, they would?

Finally, what I don’t understand is how these same arguments get trotted out every single time there’s an inflation adjustment to the minimum wage — small businesses collapsing! skyrocketing taxes! fire and brimstone! — and yet they’ve never come true. Somehow, America still exists!