> Its also worth noting that practically no businesses close when minimum wages have been increased in the past.
The problem got pushed somewhere, but where?
Very rarely does the owner of the business just eat the cost except in the very short term. If the business doesn't close usually one of two things happen:
(1) there are fewer hours available because books need to be balanced. Some workers that are able to keep their hours do better at the expense of those whose hours are cut. Basically this ends up being a wealth transfer between some hourly workers and others.
(2) prices eventually go up and cause localized increases in prices. Within two to three years you end up with the situation where that new higher minimum wage has about the same purchasing power locally as the previous minimum wage had.
The problem got pushed somewhere, but where?
Very rarely does the owner of the business just eat the cost except in the very short term. If the business doesn't close usually one of two things happen:
(1) there are fewer hours available because books need to be balanced. Some workers that are able to keep their hours do better at the expense of those whose hours are cut. Basically this ends up being a wealth transfer between some hourly workers and others.
(2) prices eventually go up and cause localized increases in prices. Within two to three years you end up with the situation where that new higher minimum wage has about the same purchasing power locally as the previous minimum wage had.