SOTU- I didnt watch but caught 1 sound byte..............$9/hr minimum wage?

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Can someone explain inflationary pressure due to the raise of min wage? This doesn't affect everyone, just people working menial jobs. It's pretty obvious looking at the S&P500, businesses have the money to pay higher min wage, it seems like they just choose not to because they can. What do you think happens to the money they pay in increased wages? Does it go under a mattress somewhere? Foreign investments/savings overseas? Lol

"Paying someone minimum wage is like telling them 'I'd pay you less if I could, but the law won't allow me, and that's how I feel about you"
-Chris Rock

[David88vert]

Can someone explain inflationary pressure due to the raise of min wage? This doesn't affect everyone, just people working menial jobs. It's pretty obvious looking at the S&P500, businesses have the money to pay higher min wage, it seems like they just choose not to because they can. What do you think happens to the money they pay in increased wages? Does it go under a mattress somewhere? Foreign investments/savings overseas? Lol

"Paying someone minimum wage is like telling them 'I'd pay you less if I could, but the law won't allow me, and that's how I feel about you"
-Chris Rock

It really only affects small businesses or large one that employ multitudes of minimum wage personnel.

Small business owners would probably be impacted the most. Take a hypothetical business that pays minimum wage to it's 6 employees currently (typical retail store).

Georgia Minimum Wage Rates - $5.15/hr
(Applicable to employers of 6 or more employees)
The State law excludes from coverage any employment that is subject to the Federal Fair Labor Standards Act when the Federal rate is greater than the State rate.

GA's rate is lower than the Federal standard : Minimum Wage Laws in the States - Wage and Hour Division (WHD) - U.S. Department of Labor

If the business owner is open Mon-Sat from 9am-6pm was paying the minimum to the 6 employees (rotating so that all get 40 hrs/wk), that is $1236/wk in pay. If the minimum went to $9/hr, then it would be $2160. That's a difference of $924 that would have to come from somewhere, and predictably, it would likely come from higher prices to consumers, which in turn, would generate additional sales tax revenue. Your dollar would not go as far in that scenario.
The other part is that the additional money in the paycheck to the lower income individuals tends to be spent, rather than saved, which would also generate additional sales tax revenue. As most of those making minimum wage do not usually have to pay out in income tax, it should not affect them that way.


A large corporation like Wal-Mart should be affected; however, with their vast resources, it shouldn't change much in the way of prices. You do have to remember though that a lot of low income people shop there, so any rise in prices would affect them disproportionately - but probably not too badly, and they could use the rise in pay.

Large corporations that employ skilled labor shouldn't see a change in minimum wage affect them at all.

Chris Rock's statement is very true in this case. It is sad, but it is true.