Quote:
Originally Posted by roly
no impact whatsoever, the people who were earning less than the minimum wage before it was introduced would have been receiving top up social security payments from the government. so they didn't suddenly have more money in their pocket, but it wasn't being subsidised any longer. also over here they put it up in stages.
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Let's say you're right and the amount of money spent by these workers was the same before and after minimum wage laws.
Still, I dont see how a business with a slim profit margin can avoid increasing their prices (to pay for the higher wages). Unless they qualify for some extra tax breaks or gov assistance, or get a big loan to continue operating at a small annual loss (due to paying higher worker wages).
Or maybe some businesses with slim profit margins will simply fold and lay off their workers. While more profitable companies will try to maintain prices and suffer reduced profit margins, but will pick up some new customers (from the folded company), which compensates a little for the reduced profit margins. And they might even hire some of the laid off workers, but I doubt they can hire all of them and still maintain previous prices (unless the minimum wage is not so high or unless government gives out subsidies).