Here's a better written article from the WSJ:

Link

The impact of the higher minimum wage will resonate even beyond that group of earners and industries. Economists say there are 2.8 million workers earning between the current federal minimum wage of $6.55 an hour and the new minimum wage of $7.25 an hour, which takes effect on July 24 and has had no signs of delay from legislators. But some estimates figure an additional seven million workers are affected because their wages are tied to the minimum and will go up accordingly.

Ryan Arfmann, who owns a Jamba Juice franchise in Idaho Falls, Idaho, is a case in point. He said he will have to boost pay to all of his 18 workers. The ones making less than $7.25 an hour will be raised to the new rate. But he said he will have to give raises to those currently earning more than $7.25 an hour because they have more experience.

As a result, he plans to cut hours for his part-time workers. "I'll definitely have to run a tighter shift each day and watch numbers like never before," said Mr. Arfmann, who estimates his business is down between 3% and 4% this year.



The change is welcome to workers such as Walter Jasper, 48 years old, who earns $6.55 an hour at Shur Brite Hi Speed Car Wash in Nashville, Tenn. He has worked there for 14 years off and on. His wife earns $7 an hour working at a discount store and will also get an increase in her paycheck. Mr. Jasper said he and his wife will be late with their rent payment of $359 this month and that the extra income will be used to pay bills.

The change is welcome to workers such as Walter Jasper, 48 years old, who earns $6.55 an hour at Shur Brite Hi Speed Car Wash in Nashville, Tenn. He has worked there for 14 years off and on. His wife earns $7 an hour working at a discount store and will also get an increase in her paycheck. Mr. Jasper said he and his wife will be late with their rent payment of $359 this month and that the extra income will be used to pay bills.

Unless The Car Wash or Discount Store downsizes employees to offset increased labor costs and then their income goes to $0.

If you assume the WSJ number to be correct (I have no idea if it is or not) then there's 2.8 Million + 7 Million workers tied to that range = 9.8 Million total. If you assume that businesses either can't or won't pass on 15% of those increased labor costs, then there will be 1,470,000 freshly unemployed with new salary of $0. The other 85% will benefit at their expense.

brettdoyle said:If you assume the WSJ number to be correct (I have no idea if it is or not) then there's 2.8 Million + 7 Million workers tied to that range = 9.8 Million total. If you assume that businesses either can't or won't pass on 15% of those increased labor costs, then there will be 1,470,000 freshly unemployed with new salary of $0. The other 85% will benefit at their expense.
The other 85% will pick up the tab by paying for unemployment, food stamps, and section 8.

staci86 said:shakyhands said:
All these articles state that the call centers that serve the drive thoughs are located in the US, not in India. I dont think many Americans would understand someone speaking to them in an Indian accent over those crappy drivethough speakers. Its hard enough to understand someone speaking from inside the store.
Even if the jobs are located in the US, the use of these call centers still represents a net loss of jobs to the overall economy. A centralized group of order takers can do the job much more efficiently than onsite personnel, thus requiring less total employees on a systemic basis.

As the minimum wage increases, employers will seek to eliminate low-end positions. The higher the minimum wage, the more motivated an employer will be to cut inefficient workers and replace them with technology, or eliminate positions while shifting more work to existing employees.

People can hold whatever position they wish regarding the benefits of efficiency, or the benefits of having a minimum wage, but the fact remains that minimum wage increases incentivize the elimination of jobs in response to the legislation. While an employee is better off at $7.25 per hour as compared to $5.00 per hour, that same employee is hurt if her position is eliminated and her duties shifted to other employees. Even if you consider these raises to be morally justified, the fact remains that these increases are job killers.

Absolute nonsense. Many 16 or 17 let alone 18 year olds are out on their own and have to support themselves. At $7.25 an hour, we the taxpayer, are still paying billions in food stamp and medical payments to subsidize your low wages.
Obviously the less enlightened employers out there dont care if their employees live in cardboard boxes and walk to work as long as they get to pocket the extra cash. In doing so you cost me and other taxpayers billions in government services. Its therefore necessary and the right of the government to set a realistic base minimum wage.

PMonkeyDishwasher said:You hear that, TripleB? You're getting a raise!

Damn, I came in here just to post that. Bravo Monkey...

I always thought minimum wage increase mostly helped union workers since hourly rates for them are tied to min wage. True or myth?

jason243 said:I always thought minimum wage increase mostly helped union workers since hourly rates for them are tied to min wage. True or myth?

I've never seen a Union Worker that didnt get at least 4 times the minimum wage.

jason243 said:I always thought minimum wage increase mostly helped union workers since hourly rates for them are tied to min wage. True or myth?

Partially true. Many unions in their collective bargaining agreements tie the distribution of pay rates partially to the minimum wage. This is almost a uniform item that is included in union agreements for service sector employees. You won't see it in the United Steelworkers contract, but you will see it those backed by the Service Employees International Union.

I worked as an employee for a arbitrator on and off for a few years and this was a common item in bargaining contracts. Its also an item that caused lots of hysterics on both sides when the new minimum wage act came into law.

nycll said:You would think the purpose of forming a Union is to aim higher than the minimum wage.

Um, that would be the point. By tying the distribution of wages to the minimum wage, you ensure nearly everyone gets a bump when it increases. A large bump in the case of service sector employees. Something like "Union members meeting XYZ qualifications shall be guaranteed a starting pay rate at least X% above federal or state minimum wage, whichever is higher."

Even if its not included in the contract, I have never seen union representatives come to the table and not use it as a talking point. This is why it is supported by every union I am aware of that gives public policy stances.

Again, we're not talking the UAW, were talking service sector unions.