Great, so all of us who arent making minimum wage dont get an $.70 raise and because businesses have to pay more for salary we all get screwed by higher prices to make up for it. The only people making minimum wage are kids who probably live at home, retired people looking for something to do, or illegal aliens. Even if you do work for minimum wage its rarely for long as long as you do a good job you get promoted.

Wow!!! I can buy about 2 gallons of gas to drive the 25+ miles each way to work....

I'm so greatful for the extra money where should I invest it... hmm.. oh I forgot I'm investing it in the big/oil and gas companies by paying 2.95 for gas when I WAS paying 2.00 not too long ago... I guess I'm investing in making big oil richer... oh joy of joys!

Looks like no more summer jobs for teenagers. You can probably also count out that raise you were going to get for all you workers in the 7-15 dollar an hour range too. Come to think of it, that sandwich shop down the street will probably jack up the prices now that he has to pay his help more.

Skrom makes a good point if you want to believe that .70 cents will drive up prices..

Yet if you look at the rising cost of gasoline prices didn't go up for most consumer goods...

Also, wages don't always rise if you do a "good job"

I'm retired I'm not "looking for something to do" I need the money... I've been promoted and I've received a .10 cent per hour raise at one job the other job I have is minimum wage.

This has ZERO effect on anyone working in the state of Wisconsin. WI state statutes already set a minimum wage of $6.50/hr. I'll take my $6.95/hr from Walmart and be happy, kthx.

Minimum wage is already higher in 35 states than the federal minimum. What's driving higher prices now are energy costs, health care and the massive growth in the supply of money (wars ain't cheap).

So, rather than deal, let's blame the folks at the bottom. That's what seems to be popular here.

The U.S is surprisingly way bellow Canada in terms of Minimum wage, right now ontario stand at $8.00 an hour ( with plans to go to $10 by 2010) and everything seems to go well although there is a bit of a lack of employment in the manufacturing sector ( due to our high dollar).

In Mass., the min. wage is $7.50 and will be $8.00 come Jan. 1, 2008. Of course the cost of living is higher here than in other places. Still, I can't believe anyone anywhere can live on $5.85.

I don't know why people are bitter over this. If you, for instance, want people to get jobs rather than collect welfare, then you must also be willing to pay them a decent wage.

Minimum wage in MO went from 5.15 to 6.50 the 1st of this year after we voted for an increase, and prices haven't risen at all. Then again, the only types of places this might actually have to raise prices as a result are crapholes like McDonalds and Wal-Mart, and as good consumers, we shouldn't be shopping there now, should we?

I don't think the recent change is going to do jack for New York State. Our minimum wage is already $7.15/hr (for general jobs), which I think is still pretty hard to live by in New York City.

@nequam: Same in CA the min. wage is $7.50 and will be $8.00 come Jan. 1, 2008.

@zolielo: same in ny

In San Francisco, the minimum wage is about $9.14. Miraculously, we haven't been overrun by newly rich McDonald's workers in BMWs. And prices have ... stayed the same. Oh, well. There goes that theory.

Whoever thinks that only illegal immigrants and idle folks looking for extra pocket change are working minimum wage is very sadly out of touch with reality in this country.

Minimum wage is just a way for employers to say "We'd pay you less, if we could."

I was making $3.35 in 1987? 1988? Thank god I was living with my parents.

@nequam: When I was in San Angelo, I spoke to someone (the maid at Air Force billeting) who was paying, IIRC, 350 a month to rent a 2 or 3 bedroom house.

Yeah, it's really cheap to live some places.

Gosh, if only they raised the minimum wage to $25 or $30 per hour, we could eliminate poverty altogether. Since the foregoing comments have demonstrated in a conclusory fashion that an increase in production cost has no effect on prices, it stands to reason that the government should be setting the minimum wages at a level where everyone can afford McMansions, Mercedes and all the blow they could ever want. They might also need to pass laws forbidding employers from laying off workers, however, to keep them from trying to reduce labor costs by hiring fewer people. Also, laws against going out of business, being unhappy, and not smiling at babies might be in order.

When you take into account inflation, the minimum wage has been less and less every year. It doesnt. In fact in 1997 when the minimum wage was 5.15 that would equate to $6.40 in todays dollars. The poorest today make even less then they use to!

I pay $315 monthly for my 2-bed 1-bath... I make $7.00 and I go to school fulltime, and I can barely make rent/bills/groceries.

I think Texas still abides by the federal minimum wage. Wish they would abpply that 70-cent increase to my pay, as well.

If the federal minimum wage jumps 70 cents the next two summers, it'd end up at $7.25, not $7.50.

Ooooh....look at all the angry libertarians. Maybe the reason teenagers, retarded people, and illegal aliens work for minimum wage is because they are the only ones willing to deal with lousy working conditions, asshole customers (and management), unpaid overtime, and other assorted wonderfulness for such low pay. You can make more per hour begging on the street and probably deal with less abuse. Now according to economic logic, since you can make a higher wage begging (therefore doing less work for more pay), it must mean that people who beg are smarter than your average minimum wage employee. But since we have outsourced all of the jobs that actually pay a living wage to unskilled employees, it could also mean that a greater portion of the population is stuck in minimum wage jobs without being able to rise up to construction, manufacturing, or script-based customer service. Since I plan on entering a career path that depends on a lot people in my local economy having a little money, it doesn't matter to me that the minimum wage is going up. However, if I were, say, a salesman, who depends on having an small number of people with a large amount of cash (which is probably made by paying lower wages to lots of employees), the idea of a higher minimum wage might make me a tad nervous. Cause a lot of people with a little money are going to spend more on day-to-day expenses, where a few people with a lot of money are going to splurge on luxury items, and God knows that no one becomes a billionaire that way.

There is a certain point where forcing raising wages will result in the jobs being lost, because the productivity of the job is less than the wage to be paid, literally it can't sustain itself.

However, there's no reason to believe that the current, or even the new wages are anywhere close to that point. It might cut into profits, and there may be a very low number of marginal jobs that will be cut out, but on the other side of the coin, new jobs will be created because of the higher amount of money churn resulting in greater demand for services (essential in a service based economy)

Price increase will abound in many business sectors.

Why? Because wages for many small business are often tied to multiples of the minimum wage.

As an example, one of my suppliers pays their entry level manufacturing employees 2.5x the minimum wage, with other employees receiving much larger wages. That "LITTLE" minimum wage increase will have dramatic effects on that specific labor intensive manufacturer with only 20 employees. On Friday I received notice that August 1st the long term office manager and an key employees will take an early retirement and the manufacturer will raise prices an average of 6% on their entire product line.

I wonder why? Maybe because labor prices are suddenly increasing 13.6% and their labor costs are, by my estimation, about 40 to 45% of the product costs?

6% is a huge chunk of a price increase. I will be sure to pass the price increase onto my customers.

Service and restuarants are even harder hit:

The local non-franchise taco stand raised prices on tacos by $0.20 on July 1st in "anticipation of the rising minimum wage".

I just went out for dinner with the family. The locally owned restuarant that I have frequent for 20+ years is having a price increase on most menu items on July 24th. The owner says that he is having to give his kitchen help a $1.50 raise or risk losing them to the chain restuarant with much higher wages that is opening down the street in the next month.

My parents favorite chain restuarant just raised the price of non-alcoholic beverages from ~$1.50 to $2.50, and non-bottled water, which used to be free, will now cost $1.50.

No free water? That really sux green slimmy swamp water.

And those burger franchises down by the interstate? Yep, wage impact is coming. Last month they were advertising on their signs that starting wages were $8.50 per hour. The first blink happened midweek. I saw a sign that said starting wages $9.50.

I am sure burger and drink prices will quickly follow.

Oh, and one last comment. My car was in a fenderbender. I backed into a telephone pole. My fault. $350 in damages. Not filing the claim with the insurance company (especially since I have a $500 deductible). The quote from the auto repair shop was good until ....... yep, you quessed it, July 24th. Why July 24th? Because the shops labor rates will increase by $2.00/hr.

Yep, that minimum wage sure is good for people.

@StevieD: So your prices go up, and the prices of your favored businesses go up, but does this mean you will have to move into a smaller house? Take on a few roommates? $2.00 an hour can make a big difference when it represents a third of your income. How do these price increases change your life? Or is it just your wallet taking a little hit?

minimum wage in my state is 6.85 I believe. But the increase is costing others jobs. I live on the border and our neighboring state minimum wage is $5.45 (now $5.85). People are coming over looking for work.

And the increase in wages is being passed onto consumers. Fast food places raised their prices almost a dollar more per meal. Our local mom and pop stores have higher prices than they used to as well. This is why I don't like the minimum wage. When you force employers to pay more for their workforce, then the expense is passed onto the consumer. Most businesses won't eat that profit loss, and to believe otherwise is just foolish to me.

I'd like personally to see the studies that show the positive sides to a minimum wage increase. Thank you consumerist.com for letting me rant.

@andrewsmash: By extension, the price increases will affect those living on small wages as well, especially since it is the low-end wage-earners who are likely to spend money on fast food et. al. in which the prices are increasing. The end effect isn't all that great for said earner ...

Besides, once more money was available, wouldn't the price of the cheap housing go up as well? Also, remember that some businesses may have issues with the new wage ...

And of course it sucks for those who make more, since they absorb the price increase with little recompense, but this is the Consumerist, where if you're above the poverty line or a capitalist everyone hates you :p

An increase in the minimum wage will increase consumer spending at the low end of the economic spectrum. More people having more money and spending it means that the economy will improve.

The same businesses that will be hit hard by increased employee payroll will, by contrast, see their bottom-lines improved by increased sales. Wal-Mart and McDonald's especially should be overjoyed, because most of that added circulating money will ultimately come right back to them.

@StevieD: It's called inflation. It'd be nice if we could have the same prices year after year, but that isn't happening. So the bottom rung needs to be given a boost, which should (over time) trickle up.
"6% is a huge chunk of a price increase. I will be sure to pass the price increase onto my customers."
Good. That's what you're supposed to do if you can't handle the hit. The customers will decide if it's acceptable or not.

"one of my suppliers pays their entry level manufacturing employees 2.5x the minimum wage"
Wages based on multiples of minimum wage are asinine. Find another supplier, or talk some sense into the fool who set it up that way.

There seems to be quite a bit of guesswork going on here, as though this is the first time it's happened. The minimum wage has risen over time. In many (most?) states, the raises have been frequent and sometimes significant. Does past experience with these raises demonstrate increased prices? There must be some info out there no?

Washington's minimum wage is already $7.93/hr, and our unemployment rate has been on a downward trend since mid-2003.

@joshlawless: Well, the cost of living is going up, so we need to set a new legal minimum. If there's mass deflation, you can have a minimum wage decrease. Cool?

Wages should be based on what someone wants to pay. If Bob id only paying his emplyoees $2 an hour chances are noone will work for him and he will have to raise his wages to attract employees. Mandated minimum wages are stupid. The only reason some places pay minimum wage which is hardly any (even McDonalds pays $2 an hour over minimum wage where I live) is because people agree to work for minimum wagge. If nobody agreed to then they would have to raise their pay to stay in business. Hence why 90% of people who make minimum wage are teenagers and illegal aliens. Its people who either live with their parents or have multiple roommates that make minimum wage. NOBODY supports a family on it.

@skrom: It would be interesting for you to provide some figures on those last three sentences.

There were complaints last year (or 2005?), when the Labor Dept. released figures on the demographics of minimum wage workers (which IIRC on their face dispute SKROM's claims), that some employers like Wal-Mart make a habit of paying workers just slightly over the minimum wage so that they can claim that their workers are better paid. This sort of practice skews the figures when studies tally the number of min. wage earners. More accurate studies look at workers earning within a range of the min. wage (e.g., within $0.50 or $1). People in this range are likely to benefit from an increase even though they nominally earn more than the minimum. I think the Terminator looked at this issue in Calif. and the results favored raising the min. wage. I'm sure somebody else has better info than me.

Perhaps it's just the liberal in me talking, but if me having to spend 50 cents more on my meal at a fast food restaurant means that their employees can make a halfway decent wage, then I'm all for it. I like helping people. I can afford that extra 50 cents. In the long run, that 50 cents is going to mean more to them than it is to me.

July 1st, it went right to $7.50 in Illinois. So mush for the wait.

To further Josh's point, which no one really acknowledged, why stop there? Why not just take minimum wage to it's logical socialist conclusion and pay everyone a hefty salary without regard to skill or intelligence?

I find it odd that liberals tip-toe the minimum wage thing, but won't just come out and admit they want everyone to make the same amount of money. Why not just admit that?

Oh my god, there is so much wank on here that it's absolutely unbelievable. Just... wow. I'm disgusted with Consumerist readers now, but I guess it makes sense that the demographic for a blog on consumerism would be greedy assholes.

@lorddave: Because that's not what we want. A doctor shouldn't make the same as a burger flipper at McDonalds. We don't want everyone to make the same amount of money, we just want everyone to make enough to live comfortably. If you happen to go beyond a McJob and make more, great. You earned it. But people shouldn't be living on the street because their job doesn't pay enough for them to put a roof over their head.

@yg17: So you do think everyone should be making at least $18 an hour, right? Because that is what comfortable living is for large cities.

So if you raise the minimum wage, the prices will go up. If you don't raise the minimum wage, the prices will still go up anyway. In fact, maybe because the prices have gone up is a good reason to raise the minimum wage so people can afford to live. Even if you have a McJob, you still need food, clothing, and shelter, or else you won't be going to your McJob.

Come on, the whole "everybody should make the same wage" argument is BS, but so is the "if we raise the minimum wage, the economy is going to collapse" argument.

The price of products and services will have to go up by a tiny amount to pay for that. On the other hand, usually somebody making minimum wage is out spending the money and putting it back into the economy, not hiding it in Swiss bank accounts or tax-shelters, so that wage increase should find itself right back into the economy, not stuffed into some Senator's mattress.

I know..if it's fine to pay adults substandard wages that they can't possibly survive on, we should just bring back child-labor! Let those little useless freeloading bums contribute something to the economy! Why, they're getting off scott-free, and not even paying taxes! This is an outrage! We could get the service-sector back on track AND have our cheap tacos too!

Jesus, folks, we're talking about going from $5.15 to $5.85. Let's see...$5.85 X 40 hours =$234.00 a week before taxes. Chop out another 10% for taxes...wow...a whole $840.00 a month to pay for food, clothing, shelter, transportation, and health-care. Look out, Beverly Hills! Here come the extravagant lifestyles!

The reason for the increase in costs is not because of a min. wage hike. It is because our government has no control over its spending. Inflation in this country is out of control. If you reduce the value of the dollars you pay people - then the only counter is to increase the amount of dollars given to someone so that they balance out. This is basic economics - and is the reason we have to have 2 incomes in the family to enjoy the same lifestyle that only 1 income would have produced only 25-30 years ago. Oh and by the way -BTW: I'm a libertarian who makes over 80k/yr and I FULLY support the min. wage hike. Unlike some of these people who are opposed to the hike - I still remember my college macro econ classes and believe it will only benefit society.

there appear to be two big viewpoints.

One is that minimum wage is a bad idea, because it doesn't let the market decide what should be a minimum wage. If we pay people two dollars an hour, then they won't want to work for us.

But we already pay people two and three dollars an hour; they're called 'Waiters' and we assume people will tip them enough to make the difference, however that money comes directly from the customer and doesn't have to filter through the mess of business taxes, etc.

Also, people who can't get a job at all may be likely to take one for 2 dollars an hour, if it's more than what they'd get for a free handout from the government.

The other viewpoint is that we need to provide people a minimum standard of living, which is a fairly socialist ideal. It's not to provide everyone the same living conditions and wage, just to make sure there aren't people living in their own vomit.

The downside of that viewpoint is that some people don't deserve to get free money because giving it to them means they won't ever try to actually work. They'll simply rely on it.

Unfortunately, this issue just seems really complicated and made out of two sort of irreconcilable differences. That's all I can make of it. You can't have it both ways. You can't be 'good' to people and also 'let the market decide'. You either pony up and take responsibility for people's welfare - with all the goods and bads - or you let people sort it out with their own lowest-common-denominator games. (Example: walmart comes in, causes local businesses to shut down, funnelling workers into walmart, who can then pay them whatever they want because the people otherwise wouldn't have a job.)

Sheesh, the ambient level of logical fallacies in here is downright toxic! Name-calling, ad hominem attacks, and straw-men are not really arguments...

The minimum wage has been studied extensively by economists, and most results suggest recent increases around the world have not caused the loss of other jobs (Stewart, 2004a; Stewart, 2004b), and if there are price increases, they are small enough to be undetectable. There is plenty more on Google Scholar; go have a look for yourself.

It always amazes me how the actual research on a topic gets completely left out of any discussion of it.

As an economist I do not like getting into the minimum wage arguments. But I will say that whatever the government does markets can correct over time; either for the better or the worse - depending on one's view.

What is neat is a contra to this topic; that there should be no maximum wage. It is an old economics trick question to mess with students.

Elasticity analysis puts forth that one could be paid any amount as long as it is approximately 1/6 times the revenue one generates.

@lorddave: By comfortable, I mean enough to at least feed your family and have somewhere to live. Perhaps "comfortable" was the wrong word, and that can be done for less than 18 bucks an hour

comfortable for me is between $12-$15 and hour, with my girlfriend working to. as of right now i make $9 an hour and that hardly pays my daycare for the month. 670 dollars for rent, $540 a month for child care, $160 a month for gas, and about $80 a month for lunch etc... i am not making it on this wage but it seems to be an excepted wage in ohio. if people make more than minimum wage then they are usually happy. dont get me wrong, if i was a teenager living with my parents, what i bring home weekly would be great, but im not and there is really no way to advance as of right now because every place wants to pay under $9 an hour. my best bet is to wait on a union labor dispute and take a scab job at $25 an hour, paid lodging and 300 a week per diem. the per diem at my scab job weekly was more than i bring home for 40 hours worth of work at my current job.

All right people, you've got this all wrong.

First, labor does NOT follow a simple supply and demand! Labor is not mobile, that is someone working a factory job for $7/hour will not and can not uproot their entire family and move across the country to take a job that pays $8/hr. Also unlike a consumer buying an apple, a job is not an optional purchase. If your choice is a job that pays $2/hour or no job, you will take the $2/hour job! You have to earn money one way or another.

Minimum wage is not a question about anything you all have mentioned. The question is what is the minimum standard of living an American willing to work a full time job should be able to maintain? Should they be able to afford food, housing, and god forbid health care or education?!

If you are happy seeing your fellow citizens starving in shanty towns like those you see in pictures from those dusty countries then by all means support worker exploitation and oppose the minimum wage. (a logical fallacy I know.)

Economists can argue all day and night about the effects of a minimum wage increase. Thats what they do, they talk about facts. However, the effect of a minimum wage is a normative question.

I'm really disappointed in consumerist's readers lately. This place has gone right down the crapper like a unwanted newborn at prom. What happened here!?

Support a maximum wage!

We should certainly be able to offset the price increases of a .70 pay raise by dropping the CEO compensation from $100,000,000 to just $1,000,000, no?

Maybe things will get even CHEAPER!

Why don't we all just go back to substance farming? is that how people used to live and eat? Whats with all this consumerism, buying things that we don't need.

I heard there is plenty of room in montana