Seems like a good idea, yes.
It seems like a good idea until you actually think about it. By raising the minimum wage to $10.10, you are effectively reducing the wages of those that make above minimum wage. You’re telling people that their labor is now worth $X dollars- their wages don’t rise, percentage-wise in accordance with minimum wage laws.
Not only that, but there will be an immediate rise in the cost of consumer products. More money in the supply lessens the spending power of the money in circulation.
Want the math?
Example: I make $10, while another person, Steve makes $8, and Suzy makes $12. By increasing the minimum wage, it at first seems I am getting a 1% raise, Steve is getting a 25% raise, and Suzy stays at the same level.
However, the value of Suzy’s labor has been effectively reduced by almost 16%. How is this fair to people making more than minimum wage?
On to the law of supply and demand-
Let’s say that everyone makes $7.25. Now, we increase that wage to $10.10, an increase of almost 28%. Sounds great! Everyone is making more money!
Except they’re not. The prices of goods and services will rise equal to the amount of the money in the supply.
I feel that minimum wage should be abolished altogether- the market should dictate the dollar amount of the wage, not the government. Minimum wage is not meant to be a career wage. If your skill sets dictate that you’re only worth minimum wage, then that’s what you earn. If you want to make more money, make yourself more valuable and learn new skills (which one can do, for free, online).
Don’t raise the minimum wage.
The minimum wage should be replaced with a living wage. If you set the value of labor below what it costs to live, the government will pay out welfare, housing, and food stamp benefits to those that earn less than that.
The means that the federal government, and therefore the tax payers (Suzy), are paying the costs of the private sector underpaying their workers (Steve). Whether or not a person works, they still have basic needs that need to be met. Working helps them pay for those needs themselves.
My company is changing the pay structure to adjust to markets that already have increased the minimum wages (ex. San Francisco) Those that were already getting paid at a higher rate (Suzy) are having their pay adjusted to stay proportional to what it was before. Prices have not been affected but sales have increased in those areas as people have more money to spend (Steve).
Don’t even get me started about students. How are they supposed to increase the value of their labor through education if they can’t afford to live let alone attend school? Not everyone has a family or lives in a low cost of living area. Not everyone will be eligible for a loan. Not everyone will be able to work 40 weeks.
Replacing the minimum wage with a living wage restores the income distribution to what it was during the 1950’s. Our national wealth, stock markets, corporate profits, GDP, worker productivity, and executive compensation have all skyrocketed since that period. The one thing that has remained mostly flat is employee pay, especially for those near the bottom.