"Most of the debate surrounding the minimum wage has focused on the question of whether raising it destroys jobs.
Conservatives say yes, liberals say no and both eagerly point to various economic studies to buttress their point.Less attention has been paid to what impact a hike will have on those who will still be working.
After all, even if the hike does cost some jobs, that may still be a worthwhile trade-off if enough other low-income workers benefit.
But will those remaining workers really be better off?
Not necessarily.
They may lose out as employers cut back elsewhere.
Some anecdotal evidence from Seattle, which recently voted to raise its hourly rate from $9.32 to $15, appears to be bearing that out.
There’s also the awkward fact that a higher minimum wage actually benefits some larger businesses by reducing competition.
Walmart may be able to pay a higher wage, but neighborhood mom and pop stores may not.
...A Center for Economic and Policy Research study from February 2013 argued that the evidence was “either inconclusive … or suggestive of only small economic effects.”
But if that is the case, then how do the businesses that employ people at or near the minimum wage absorb their now-higher labor costs? CEPR, to its credit, offered some answers:
"Some employers may cut hours; others, fringe benefits; still others, the wages of highly paid workers. Some employers may raise prices (particularly if their competitors are experiencing similar cost increases in response to the minimum wage).
Some employers may see their profits fall (along with those of their competitors), while others may reorganize the work process in order to lower costs."
In other words, the workers will simply lose out elsewhere.
Meanwhile consumers will pay higher prices and the businesses will see lower profit margins.
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