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0 pointsyummyfajitas14y ago0 comments

Do you think they'll just close up shop? Of course not.

Some stores on the margin will be driven bankrupt by the increased costs, and these stores will close up shop.

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But every store in that business would see their labor costs rise proportionately, so the net effect would be zero. If Walgreens' costs go up by 5%, so will Rite Aid's, CVS's, etc. Stores will just pass on the costs to the consumers. Plus, the labor cost of stores like Walgreens are very small compared to the merchandise costs. And the high-paying jobs (Pharmacists, etc.) would not be affected anyways, since you're just raising the minimum wage.

Other than Walmart, you'd be hard-pressed to find a business where the minimum-wage employees are a significant cost item in the budget.

philwelch14y ago

> Stores will just pass on the costs to the consumers.

Which just eats up the increase in minimum wage.

glhaynes14y ago

To some extent, yes - but to what extent? Surely not entirely.

Does anybody have numbers on this sort of thing? Because if we just assume the cost is passed on to {all consumers}, much of it would be eaten up by non-minimum wage-earners, the majority of the workforce (and thus the majority of consumers).

And much of those costs may also be passed on to products that aren't generally bought by minimum-wage earners, too.

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orangecat14y ago

Stores will just pass on the costs to the consumers.

Which just shows that the minimum wage is a convoluted and inefficient form of welfare. If you want to help poor people, give them money. The end.

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