Saturday, July 19, 2014
$100 minimum wage – what would REALLY happen? :-)
$100 minimum wage – what would REALLY happen?
Wal-Mart’s labor costs (7% – average $12 an hour) would go up 900% – Wal-Mart prices could go up 50%.
McDonald's labor costs (33% – average $9 an hour) would go up 1100% – McDonald's prices could go up 400%.
Wal-Mart wages up 900% – prices up 50%.
McDonald’s wages up 1100% – prices up 400%.
So far both their workers look to come out ahead (in our crazy scenario) – if only they could live their whole lives on these two job sites. What would happen when the rest of the employee world caught up with their wild raises is hard to say.
It is easy to say what would happen if the federal minimum wage were raised to $15. Wal-Mart wages would jump 50% – prices up 3.5%. McDonald's wages would about double – prices up 25%. Even if Wal-Mart sales dipped 3.5% and McDonald's sales dipped 25%, their employees would be way ahead.
Easy to calculate* how much a $15 an hour minimum wage would add to the cost of producing America’s products and services: 3.5% (10X what E.I.T.C. transfers clumsily, in once a year lumps). Don’t worry; the 45% of our workforce earning less than today's minimum wage (which is, unbelievably, $1.50 below 1956’s minimum wage) is not going to be laid off over that 3.5%.
* Half the workforce, 70 million workers X $8,000 average raise = $560 million = 3.5% of our $16 trillion GDP (bottom 5% now at minimum wage get two average raises).