I was arguing with a friend the other day about increasing the minimum wage to \$15 per hour,

Looking over this article


Mostly the charts you can see that most workers in the retail, food service, cashiers, make less than \$15 per hour

So if took 3,131,390 food service workers, say they make anywhere between \$8 and \$14 giving you a mean of \$11 per hour, that gives you and average of \$34,445,209 for every person per hour. Bump all of them to 15 per hour, \$46,970,850 for every person per hour giving you a difference of \$12,525,641 that the food service industry would have to pay per hour for every person more.


If you 3,131,390 food service workers and 624301 restaurants in the United States that would give you an average of 5 workers per restaurant once again \$11 to \$15 5 * \$11 = \$55 per hour 5 * \$15 = \$75 per hour, difference of \$20 per hour to keep the cooks cooking.

So my questions:

Would the restaurants have to increase prices to maintain the same amount of cash flow?

Would the restaurants have to let people go in order to keep the same cash flow?

Would restaurants be expected to eat the increase?

Also would it be incorrect to say that if the same theory applies true to the food service industry would it be the same for retail specifically brick and mortar?

I have also heard that increasing the minimum wage would encourage people to get off assistance and get jobs, would there be any jobs for them get? Would we as a whole then have to pay less taxes? How could we benefit from more people getting off assistance?

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    $\begingroup$ economics.stackexchange.com/questions/429/… $\endgroup$ – Kitsune Cavalry Jan 18 '17 at 6:03
  • $\begingroup$ Please use the search function before asking, we already have quite some material on minimum wages in particular. Also, the system of the website is best used if there is one question, per question. $\endgroup$ – FooBar Jan 21 '17 at 19:49

To answer but one point: most restaurants barely break even---that's because it's a business with low barriers to entry and any sustained increase in sales at a location will be soaked up by their landlord. So definitely not the third: restaurants can't eat the increase. Restaurants' landlords might do---it depends on whether non-restaurant businesses would outbid the now less profitable restaurants for rent or not. (Most likely, we'll see less business overall for restaurants: people will eat out less. Hence, damage to the economy.)

As a more general point: places that employ minimum wage workers also mostly sell to the poor. Think McDonald's vs eg a fancy restaurant with a well-paid famous chef. It seems weird to me to make these mostly poor customers of these businesses pay for other poor people's welfare; as opposed to the general public via a progressive tax system that makes rich people pay more taxes.


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