I’m all for fair pay, even if it means things (products or services) become more expensive. But therein is the problem: If the minimum wage is ten dollars an hour and you’re making twelve dollars an hour, that’s very different from minimum wage being twelve dollars and you’re making twelve dollars. Raising the minimum doesn’t just give minimum wage earners more money, it simultaneously devalues the money they receive. Does it devalue it at a rate proportionate to how much more they now make (on paper)? I don’t know. We almost certainly have to increase it (x+n)% to realize a benefit that on paper would come from an x% increase alone.
Globalization and protectionism also play a role here, and are a critical factor in the answer (think global minimum wage vs local minimum wage).
It does not devalue it if they're sharing demand for those products with people who make $50 an hour and a select few who make $1000 an hour - assuming those incomes don't go up proportional to the increase in minimum wage.
No, it definitely does. I’m not talking about the old “everyone’s income will just go up” defense. There is a “time added” cost that is a part of the price of any good or service (which may comprise only a part of the value added measure). Imagine a product that is created from raw materials so abundant as to be in and of themselves worthless. Its cost is purely the cost of the time (and effort, which is actually convertible into time) that went into it (amortizing the cost of tools and equipment, overhead, utilities, etc). This “time cost” is a component of any product or service for sale. If the wheel on your car used the same exact materials and the same exact manufacturing process but took ten times longer (just stretch every step out) it would cost more, and not only because they can make less of them.
This time cost cannot be less than a factor directly proportionate to minimum wage (local minimum wage or global minimum wage depending on economic policy).
In a sense, minimum wage is the cost of (human) time itself. You’re saying “regardless of the labor involved or otherwise, the skill involved or otherwise, the care involved or otherwise, the social skills involved or otherwise, the know-how involved or otherwise, this is the lowest you can pay someone to do something on an hourly basis (with many caveats, such as allowing employers to deduct the cost of services they provide their employees from said wage, etc). You can’t raise that cost without the cost of everything else shifting upwards by some extent with it. No one that understand economics debates that. The question is just how big this shift is.
I think that ignores, in a holistic sense, the effect of increased consumer spending, health benefits/better health outcomes, tax revenue etc.
If people are buying more because of wage increases, what is the macroeconomic effect? If people have better health care and take less sick days, what is the effect? If the government has more revenue to spend on programs to benefit people like public transit, job training, drug treatment, what is the effect?
Also worth it to a look at this paper, that shows that there aren't less jobs when you raise minimum wage.
Also CEO income (an exec compensation in general) has risen dramatically over the past 20 years while regular wage growth has been anemic. Are CEOs dramatically more productive, and workers barely so? That seems illogical, much more likely that the executives are capturing the value of their workers increased productivity. A company doesn't have to raise costs to consumers, it can always cut executive compensation.
If people are buying more then it means more demand, leading to increased price, unless there was an excess in supply (production capacity) in the first place.
Globalization and protectionism also play a role here, and are a critical factor in the answer (think global minimum wage vs local minimum wage).