[belsarius]

I've actually enjoyed the back and forth debate on minimum wage, and it has moved me away from being an advocate for it, to mostly being neutral on the issue. I think both sides are right and wrong in their evaluations.

In the near term there is definitely job loss at the minimum wage level which counteracts a lot of the gains in the wage increase, Zarley is right that in effect there is no new money to go around, and cuts are made to maintain costs.

However in the more medium term I think Iggy has a point that those who lost their job will be able to find work and as noted by others a minimum level of service is required and additional hiring will be required. This will generate more economic growth as the low end earners tend to spend the most locally. This will drive up demand and force more labour at the higher wage.

In the longer term however the increased costs will simply be placed on the consumers and end up increasing inflation. This will reduce the purchasing power of the higher minimum wage and rebalancing the market at the new minimum wage. Costs will rise, prices will rise and everything will balance and the high end earners will feel almost no difference and the new minimum wage will still be below the livable wage.

Trying to use minimum wage alone in a market economy to lift people out of poverty is ineffective and inefficient. It addresses the problem bluntly, and ends up creating more problems; and in the end doesn't make a difference.

I think this kind of minimum wage increase needed something else to offset the damaging effects, to small businesses especially. I would have loved to see some sort of tax credit issued for businesses which maintained their employment levels to ensure they could afford the higher wages. That credit would easily have been compensated by the individuals paying more and the generated activity. Without it, like Zarley demonstrated, you aren't increasing pay, just moving it to a smaller number of employees.