> What is the federal minimum wage? Who benefits from it being $7.25 an hour? Not the common people
Source on that. Higher federal minimum wage causes low profit, manufacturing jobs to move off shore. The higher the federal wage the more automation becomes a higher ROI. The more those in poverty have to spend, the more competition for scarce resourcing (e.g. housing), and the more housing inflates in cost.
Simply raising federal minimum wage doesn't necessarily benefit all.
You could deal with that through subsidy. Make the minimum wage livable, then any industry you want to keep onshore for strategic reasons you help out. Free market lovers might hate this but effectively the government does this anyway by definition for everything provided for free.
> Make the minimum wage livable, then any industry you want to keep onshore for strategic reasons you help out
This is a model for shit labour productivity à la the Soviet Union or Argentina. Much better to have no minimum wage and a UBI, to avoid distorting your industry through your wage policy.
Why? Subsidy is saying: you know you can only compete with China if you pay $5 an hour, so pay $10 and we will pay the rest because having a steel manufacturing industry is important to the government. Maybe the sub is based on productivity rather than wage. $ per tonne.
> Subsidy is saying: you know you can only compete with China if you pay $5 an hour, so pay $10 and we will pay the rest because having a steel manufacturing industry is important to the government
I'm not saying it can't be done. I'm saying everyone who has tried something like this wound up with a sclerotic industry. At a certain point, you wind up with the subsidy grantor deciding who can and cannot participate in the industry. Those already in don't want competition. The rest follows quite simply. (Moreover, your export market gets constrained because foreign countries will overcorrect undoing your subsidy with tariffs.)
We do this sort of thing in America. It's why we have booming shipbuilding and steelmaking industries.
Source on that. Higher federal minimum wage causes low profit, manufacturing jobs to move off shore. The higher the federal wage the more automation becomes a higher ROI. The more those in poverty have to spend, the more competition for scarce resourcing (e.g. housing), and the more housing inflates in cost.
Simply raising federal minimum wage doesn't necessarily benefit all.