A conversation has been ongoing on another thread about wages. The accusation is that the poor in America are suffering horribly. The proposed solution is massively increasing the minimum wage.
I was asked to live on $10,000 a year because that's what the poor make working full time. Let me answer that first: NO. One, I have worked hard to get where I am, and two, you don't find families for the most part working minimum wage jobs. The people working minimum wage jobs are for the most part high school students and young adults.
Now, I'm going to get into a little bit of remedial economics here and point out that what you make is in proportion to the amount of wealth you create. Brad's tried to drive this point home countless times, and I am going to repeat it here. Want more money, create more wealth. If your current boss doesn't reward you with increased pay, it will not be long before you find someone who will. Good employees are a commodity, and employers pay for that commodity.
The reason burger flippers don't make much money is because a burger has limited value. And to keep customers buying burgers, the company has to create a perceived value by keeping their margins as thin as possible to maintain a respectabe profit. Regardless of what some people will tell you about the rich not paying taxes, don't believe it. There are property taxes to be paid, sales taxes to be paid, franchise fees, the list goes on and on. Not to mention unemployment and worker's compensation insurance, which cover even the minimum wage employees. The truth is, fast food places don't make a large margin on most of their burgers. That's why they push "value meals" to sell high margin items like soft drinks and fries.
Now, if you're going to increase the wages of the employees that work at these burger joints, you must increase the cost of the food. This means losing customers, as a certain percentage of customers will decide it's not worth it every time you implement a price increase. The charm of fast food is its convenience. It is horribly unhealthy, and it's not even reasonably priced when you can make a sandwich and put it in a ziploc bag for much less. As the price of fast food climbs, it becomes less convenient.
Because of the decreased volume, the business owner would be forced to increase prices further. At a certain point, consumers will stop buying, realizing they can purchase food cheaper at the supermarket. The entire fast food industry could be gutted by the endless cycle of increasing wages.
Business have tried other strategies to avoid price increases. Ever notice a gallon jug of bleach is getting harder to find? Or that McDonald's hamburgers are edging closer to the size of White Castle sliders without the taste? (The patties, for those keeping score at home, are 1/10th of a pound meaning a smidge over an ounce and a half. Clara Peller was ahead of her time). Ultimately to increase wages they will need to massively increase prices to the consumer.
There is a way to increase your earnings potential, and that is to increase your value to your employer. Personally, I haven't made minimum wage in a primary job since 1993, and I've done it without a college degree. The job I currently perform is one that many people can't perform; the certs I hold aren't much, but they do give me an edge over Joe Schmoe off the street. But raising the minimum wage increases not only doesn't help the people it targets, it hurts businesses, and more importantly, it hurts people in skilled labor positions.