But I'm sure no business will increase prices to compensate for their increased expenses. And if they do, well, I guess we'll just have to put some price controls in place. Did I mention Seattle has a member of the Socialist Party on the City Council?
I heard about this on NPR. Did you know that the Socialist is campaigning heavily for a tips exemption/credit on the wage?
The issue of minimum wage increases has become more complicated for me. You have people who's labor is really only worth the lower wage. You also have people who's labors have far higher economic benefit, but are paid less because they're easily replaceable, meaning they lack bargaining ability.
The latter is where the economic 'benefits' from raising the minimum wage come from - the extremely wealthy are both more skilled and in better positions on the bargaining table, better able to accumulate that wealth. But they're looking to invest, and I think we've reached a point where additional investment is of limited value. So you get hugely inflated values for infrastructure, extremely low interest rates(because everything more worthwhile has already been invested in), etc... Raise the minimum wage and the low income types get more money(on average), which they then spend on the economy buying 'stuff', which makes the economy go round.
You need the consumption to justify the businesses. As such, I think the government should act as a sort of economic "unemployment insurance", acting to keep the economy rolling when a downturn occurs, then getting out of the way(other than collecting taxes to pay back into the insurance fund) when an upswing occurs. Stability is the name of the game.
Other than that, how do we encourage consumption, business, employment? I'd say get out of the way of small businesses. Start clearing out all the bullshit protective regulations. Unless it deals in hazardous chemicals a hair salon shouldn't need extensive licensing. It should take less than 20 hours of legal wrangling to open up a silk-screening store, etc...
Create a labor shortage amongst the minimum wage types and wages will take care of themselves.