Even if your numbers are true, the point you are missing is that productivity isn't up as a result of minimum wage workers suddenly being better at their jobs. Productivity is up because businesses that employ minimum wage workers have been forced to cut staff, wages, and adopt means of automation to offset increasing labor costs. Also, for as long as we've been tracking worker productivity, wages have always naturally increased with a rise in productivity. If burger flippers have really gone from flipping 60 burgers per hour to 240 burgers per hour they will be compensated accordingly without having the government/voters forcing the wage on a business.
In most industries yes. Not in the minimum wage industries that thrive on such however - that's the problem.
I always try to stress that raising prices isn't always an option because as you raise prices you'll have a segment of customers that trade down to a cheaper option (or stop purchasing that product all together). Last time I took a 5% price increase, my transactions dropped 5%. Maintaining a certain level of volume is nearly as important as maintaining a level of revenue because more volume insulates you from economic factors that are out of your control. Lower volumes leaves you extremely vulnerable during economic downturns.
Funny, my company actively had me try to keep our wages (grocery) ahead of union wage rates to prevent unions encroaching on our business - yet my company remained more profitable with lower consistent pricing than they those places that were paying identical staff less. (And generally staffing FAR fewer - I kept 400 people at my last location, was the largest in the company at the time - most groceries in our region staffed around 4 dozen people for an entire location nearly the same size)
Now all my non supervisor employees make minimum wage. Until just recently my supervisors were making $1-2 more than the kitchen staff any my managers 2x the supervisors (recently I was able to fund a pay increase to my management staff due to some economic factors, some macro but some also localized). None of this is to mention the erosion in my compensation as well. The minimum wage increasing did not increase productivity, it forced me to pay minimum wage to my more productive employees rather than being able to offer them raises.
How many payroll hours a week we talking, are you honestly saying that your business lives and dies on what is likely a matter of $500 or less a week? If that's the case, you're not running a profitable business and should be failing anyhow - you're just offloading your failure onto your employees that aren't versed well enough in how work is supposed to operate to know better.
But as far as your other points about raising the minimum wage, the problem you have here is that the majority of minimum wage employees don't need a living wage. They are teeneagers, retirees, or second household incomes. The minimum wage is a very poor way to help those in poverty (qualifying for welfare/food stamps) as they are the ones who patronize businesses that pay lower wages more frequently.
So the majority doesn't, fuck the rest? That's an intelligent choice. If we extrapolated that out, business owners like yourself make up a minority of the overall workforce, we could just move your marginal tax rate up to 98% again and that would be fine, you're not a majority after all.
In addition when you talk about "second incomes" you do realize the majority of those working a minimum wage job as a second job do it because their other job is minimum wage as well, right?
For example compare Whole Foods to Walmart. Whole Foods already pays their employees at or near $15 an hour but has a more affluent customer to support the higher costs. Walmart pays near minimum wage and has a much lower income clientele. Now you increase the minimum wage to $15 an hour Whole Foods doesn't have to change one thing and can keep all their customers. If Whole Foods decides to also proportionally increases their wages their customers can usually afford the passed on costs OR have the option of trading down to shopping at Walmart if they cannot afford Whole Foods anymore. But when Walmart is forced to raise their prices to compensate for increased labor costs their customers have no choice but to pay the increased costs. A minimum wage increase that is funded through pricing effectively acts as a super regressive sales tax that disproportionately affects lower income households.
Uh, you do realize for the Wal-Mart example, they just jacked their employee minimum pay drastically right? And with no appreciable difference in pricing. Like it literally just happened, and I've not noticed any prices going up. Heck, they've started beating the club stores on some stuff like Ribeyes recently POST-RAISE. It's not "the only way" - as I said earlier - it's the "only way" for a business that's actually failed but is just offsetting the loss to another portion of it's balance sheet. [And this is coming from business school teaching BTW - not sure what your background is, but I've got a MSHRM - which is MBA equivalent although focused on personnel - not sure if MBA goes as in depth to such though - I'd assume that you're just running a business without a business education however though from the very narrow view you've been taking here however, claiming zero upside to greater wages is something I didn't see in my undergrad or proper business education - there's a balance to be struck for sure but it's not lopsided like your presentation]
The only reason it works with minimum wage employees is simply because of the churn that's "expected" - but it does nothing for the few that get trapped in such positions longterm - if we start saying "well most X don't Y" that's a very slippery slope that can be used to warrant punishing the highest earners, the lowest earners, the disabled, minorities, or whatever else. Stuff that flies in the face of what America is founded upon.
From a basic productivity standpoint, its of more value to a business to keep experienced employees longer - does it not? Wouldn't you rather have an employee you're paying 30% more that has two years experience and double the productivity of a starter?
If you want to look at helping those who cannot afford to live in their areas or those who qualify for welfare/food stamps you'd be much better off looking at options like expanding those benefits, housing benefits, or something like increase the EIC.
Which ends up going into taxes, generally paid for by the brackets you'd find yourself in at a far less efficient rate and higher risk of abuse and/or being set up too conservatively and leaving people in a lurch. It is ALWAYS better for someone to be able to live productively without outside intervention because things can and do go wrong. Either with people finding a loophole to qualify when they shouldn't (wasteful) or people that truly have a clear need that fall through the cracks for whatever reason. (i.e. in Mayland I'd hear complaints regarding it taking an average of SIX WEEKS to qualify for basic benefits like food stamps if you had even $1 of income, FIVE YEARS wait list for Section 8 housing, EIC by it's nature of course will always have a delay of approximately a year of course as well [and of course since it's one injection of cash every 12 months has limited value to actually improving their situation])
Oh, and just the hammer home the 'minimum wage employees don't need living wages' aspect, I'd cite papers but estimates on what percentage of minimum wage employees fall into the "not needing a living wage" category vary wildly from 70%(or lower) up 95%(or higher) depending on the the author and their agenda. Lies, damn lies, and statistics and all of that.
Note that most of those people are easy to tell quite obviously, and even with an increased wage they still wouldn't hit the numbers - because as a rule of thumb the "don't need" category ask for limited hours, rather than trying for full time. Additionally most of those reports peg it to the "poverty level" which is a bad number, which I'll cover a bit later.
Also worth noting, the Congressional Budget Office estimates that an increase to $10 per hour of the federal minimum wage will result in a loss of 500,000 jobs and estimates that 4/5ths of the income gains will go to households already above the current poverty line.
Ok two things here:
1) Poverty line: The poverty line figure is an inherently flawed statistic - for starters it doesn't account for things like the increased costs and need for furthered education to better employ oneself. It's also inordinately low for many areas. $25k or so was the poverty line for a 5 person household in 2013 - for someone stuck living in NYC looking at a minimum of a two bedroom [since with 5 obviously you'd need at least one bedroom for the parents and another for the three kids] the cheapest apartments I'm seeing on a quick search are $2600/mo - lets assume there's some cheaper but harder to find and say there's a $2k one though. Literally at poverty line they're making rent AND NOTHING ELSE - NOT EVEN FOOD/UTILITIES/ETC.
2) If you've actually read full analysis of that CBO report, it's not a flat 500k lost jobs because the jobs would disappear - the majority case is that people would stop working second jobs. I believe the estimate of jobs actually truly disappearing was around 50-100k. It was discussed on the politics thread a long time ago with a nicely elaborated explanation of how they'd disappear.
I personally hate welfare, I think it's something that should only be there for those that truly cannot work for any means - and I hate seeing businesses that abuse it's existence to pad their bottom line while only paying a small portion of the taxes to support it. Honestly pisses me off seeing companies like mine (that was regularly in the Forbes Top 100 places to work list since it was started, in the top 10 during my years there [probably still is, but get fewer updates since retiring]) pay the same portion of taxes towards welfare as the McDonald's down the street that had a dozen thirty-somethings working there no doubt many of them in the "minority" you try to whitewash in your arguments.
Honestly having welfare around to even make such abuse possible is a travesty - it serves a function - but it's function isn't supposed to be to let some businesses that would fail if the invisible hand of the market was operating unimpeded (because no one would work there if it wasn't a livable wage without means to supplement it - no employees = no productivity = failed business).
PS - For your anecdote, I will say my area I lived in growing up was the same way - but I lived in Upper Middle Class neighborhood - the minute you drifted into neighborhoods that were less nice, the demographics were clearly quite different with far fewer "kids/retirees" working and more thirty somethings stuck not able to do something better.
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