Guys, it's very simple what would happen here if we raised minimum wages. The cost of goods would not go up, at least not to any real noticeable measure. What would happen is unemployment among the lowest skilled workers would double overnight.
Let's say Company A has 10 employees making 5.15 an hour, all basic menial stuff. Now, let's say we were to double the minimum wage to make the math easy. Now workers are getting 10.30 an hour. But guess what, Company A is only going to hire 5 instead of 10. The 5 lowest skilled among the 10 will be out of a job and priced out of the job market completely. It would not affect most the people on this site, but among the most vulnerable among us, their lives would be ruined. This would leave these people at the mercy of the state. So now the state has to come in and keep these people alive. It totally refutes the whole idea to begin with. Why not just have the state take care of these people now? Why go through the charade?
In a free market system, wages are determined entirely by replacement cost. Every single worker in this country has a replacement cost. For some people, like Albert Pujols, his replacement cost is very high. Perhaps the CEO of Goldman Sachs has a very high replacement cost. The janitor at a local high school has a very low replacement cost. If you raise his wages, in other words, by changing one of the variables in the equation, you need to change all other variables to get the same output. So a higher wage means you need to find a higher skilled worker and give them more responsibility.
You can raise wages all you want. Hell, you can make minimum wage $100 an hour. All you will do is kill the low end of the workforce, the very people you are trying to help. The reason the system works in Canada and Europe is not because they pay their workers higher wages, but because you have state sponsored welfare. Once you start paying people to sit around and do nothing, nothing is what you get in return. You add zero productivity to society.
There is an answer to the problem. It's not higher wages. It's better education. Instead of raising kids to work at fast food restaurants and sweep floors, you need to raise kids to become doctors, researchers, chemists, programmers, architects, teachers, nurses, engineers, etc.
Of course this would require people actually working towards these goals. Both the young people in this country, their parents, and the educators.
