On Raising the Minimum Wage

So, the argument goes something like this:  If you raise minimum wage, corporations will pay for that cost by raising prices, thereby increasing inflation, and we'll all be poorer for it as everything gets more expensive.  The problem isn't wages, but inflation. Therefore, we should not increase minimum wage.

It follows, that it's necessary that some people work full time yet live well below the poverty line because otherwise, if we raise their wages, they'll end up even poorer because everything will costs so much more - right?  So, we're actually helping people by maintaining a lower wage for them and letting them choose between heat or food.  We're awesome! 

I don't buy it.

Check out this video.  It's worth it to watch the whole thing even though it's 25 min.

The counter-argument:  If we raise minimum wage in corporations that are profiting, they will see a slight reduction in profits, and the CEOs will take home a little less. Raising prices is NOT a necessary result of raising wages.  Yes, that's right.  I think the company should eat the loss, and a recent Business Insider article agrees. The video shows that in States that raised the minimum wage, "Across the board rigorous research makes it very clear that business have been able to afford the wage increases."

AND, the increase in wages stimulates more spending from a ton of people who can now actually afford a luxury or two.  Maybe even a hamburger.  So, overall, the increase in spending counters loss from actually paying people a respectable, living wage.   It's not a matter that nice corporations ate the loss for the good of society, but that corporations didn't experience a loss.  They can maintain profits by increasing the number of people who can buy their stuff.

The one line near the end of the video makes a different point that's equally important.  Since there are too many variables to have any certainty with respect to precisely what one company will experience when they raise wages, we have to stop looking at it economically and start looking at it ethically.  It's just wrong to pay people a wage that forces them to work more than 40 hours/week in order to meet basic survival needs.

I always go back to Rawl's veil of ignorance assignment on issues like this:  If I were to create a society in which I didn't know which position I'd end up in, would I maintain that some people can be paid less than is enough to survive?  Because that could be me.  And, in real life, right now, if something happened to me, it could be my kids.  Full time workers shouldn't have to live in poverty - especially not so others can maintain their standards of ridiculous excess.