Here in Australia they've announced raising the national minimum wage by 5 percent.

Seems good on the surface but at the same time it can't be that simple right?

SRS I don't really know much about the subject am curious to hear responses.

I think it depends on which lens you are looking at the issue through.

On the one hand it's good for the lowest paid (most vulnerable) members of society because it allows them to keep pace with the cost of living increases. That's a good thing on the face of it, but only if you look at it from the low-paid workers' perspective.

There are always unintended consequences because we live in a complex world.

If you raise minimum wages by 5% because inflation has increased, it sends a strong signal to the market that inflation is here to stay. This is compounded by the fact that they haveanticipatedfurther inflation for the next 12 months, which further entrenches people's expectations about inflation going forward. The risk here is you can create a wage/price spiral or runaway inflation, because the two have a symbiotic relationship. If prices go up, people demand higher wages. If wages go up, businesses are forced to increase their prices so they can continue to make a profit.

From a business owners' point of view, wages are another input cost of their business. If wages go up by a large amount, the business owner is more likely to either:
- not hire new workers or
- let go of existing workers because they can't afford to keep them on.

So it may be a negative for the worker if minimum wage is increased, because they may find themselves out of a job.

It is not an issue in Australia at the moment because unemployment is at 50 year lows, but it's something to keep in mind.

Interesting... thank you for taking the time to give solid response srs.

Also misc forum seems slower than ever these days.

I can remember reading some of economists Walter Williams articles agains raising the minimum wage. One of his articles ~

"Minimum Wage Cruelty"

http://walterewilliams.com/minimum-wage-cruelty/

There are political movements to push the federal minimum hourly wage to $15. Raising the minimum wage has popular support among Americans. Their reasons include fighting poverty, preventing worker exploitation and providing a living wage. For the most part, the intentions behind the support for raising the minimum wage are decent. But when we evaluate public policy, the effect of the policy is far more important than intentions. So let’s examine the effects of increases in minimum wages.

The average wage for a cashier is around $10 an hour, about $21,000 a year. That’s no great shakes, but it’s an honest job for full- or part-time workers and retirees wanting to earn some extra cash. In anticipation of a $15-an-hour wage becoming federal law, many firms are beginning the automation process to economize on their labor usage.

Panera Bread, a counter-serve cafe chain, anticipates replacing most of its cashiers with kiosks. McDonald’s is rolling out self-service kiosks that allow customers to order and pay for their food without ever having to interact with a human. Momentum Machines has developed a meat-flipping robot, which can turn out 360 hamburgers an hour. These and other measures are direct responses to rising labor costs and expectations of higher minimum wages.

Here’s my question to supporters of higher minimum wages: How compassionate is it to create legislation that destroys an earning opportunity? Again, making $21,000 a year as a cashier is no great shakes, but it’s better than going on welfare, needing unemployment compensation or idleness. Why would anybody work for $21,000 a year if he had a higher-paying alternative? Obviously, the $21,000-a-year job is his best known opportunity. How compassionate is it to call for a government policy that destroys a person’s best opportunity? I say it’s cruel.

San Francisco might give us some evidence for what a $15 minimum wage does. According to the East Bay Times, about 60 restaurants around the Bay Area closed between September and January. A recent study by Michael Luca of Harvard Business School and Dara Lee Luca of Mathematica Policy Research calculated that for every $1 hike in the minimum hourly wage, there is a 14 percent increase in the likelihood that a restaurant rated 3 1/2 stars on Yelp will go out of business. Fresno Bee reporter Jeremy Bagott says that even some of San Francisco’s best restaurants fall prey to higher minimum wages. One saw its profit margins fall from 8.5 percent in 2012 to 1.5 percent by 2015 (http://tinyurl.com/y6wy3gne). Most restaurants are thought to require profit margins between 3 and 5 percent to survive.

Some think that it’s greed that motivates businessmen to seek substitutes for labor, such as kiosks, as wages rise. But don’t blame businessmen; just look in the mirror. Suppose both McDonald’s and Burger King are faced with higher labor costs as a result of higher minimum wages. McDonald’s lowers its labor costs by installing kiosks and laying off workers, but Burger King decides to not automate but instead keep the same amount of labor. To cover its higher labor costs, Burger King must charge higher prices for its meals, whereas McDonald’s gets by while charging lower prices. Which restaurant do you think people will patronize? I’m guessing McDonald’s. What customers want is an important part of a company’s decision-making.

But there are other actors to whom companies are beholden. They are the companies’ investors, who are looking for returns on their investments. If one company responds appropriately to higher labor costs, it will produce a higher investor return than one that does not. That means “buy” signals for the stock of a company that responds properly and “sell” signals for the stock of one that does not, as well as possible outside takeover attempts for the latter.

The best way to help low-wage workers earn higher wages is to make them more productive, and that’s not accomplished simply by saying they are more productive by mandating higher wages.

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate webpage atwww.creators.com.

It’s retarded. All it does is cause more inflation. So in the end, it’s not even good for the people being paid minimum wage cuz everything will just cost more.

Raising the minimum wage can only contribute to inflation if the wage rate is above the “market clearing rate”

In Australia (which is where OP asked about) it is not, so it will have no impact on inflation.

In any case inflation is well above 5.2%

So in real terms it’s a wage decrease

Overall I don't think it has much impact on an economy at all, good or bad.

Most employees are making above minimum wage, so it doesn't actually impact a whole lot of people.

Wages go up at the same time reserve bank is trying to curb inflation lmao

Also… the parasites that run this country just voted themselves a RECORD payrise

https://www.9news.com.au/national/ho...f-bec0f5fb007f

Giving trillions to corporations under the guise of “interest free loans” has done more damage then some minimum wage pleb ever had

Raising the minimum wage should have been done slowly over the years to keep up with typical cost of living price rises. Going from $7 something an hour to $15 an hour was absolutely idiotic. It blows my mind people thought there would be no negative consequences to this.

^ This. If the minimium wage goes up $5 then someone not on the minimium wage also wants their wage to go up $5, otherwise everyone else suddenly feels like they're worth $5 less. Then companies have to increase the price of their products to make up for all of those extra $5's, and suddenly nobody is better off.

Another baffling thing that these people failed to realize is that raising the minimum wage affects multiple levels of wage brackets. So you make $15 an hour now to flip burgers, or $18 to drive a forklift.......what about Physical Therapists Assistants.... Nursing Assistants, EMTs, hell even local cops where I live make less than $20 an hour. These are all jobs that require some level of education, and in may cases at least an associates degree. So now you have people with zero skill making more/equal to people in semi skilled positions.

Wrong.

Lets say minimum wage is $8/hr and you've been a good little worker and have worked your ass off for 2 years and have been promoted to shift leader and now you make $10/hr. Big boy govt comes in a now minimum wage is $10/hr so the little chits on your team now make the same as you and because you weren't riding the line you dont get a bump to compensate so you get pissed and threaten to leave. They say....well Timmy you do what you have to do so you take your experience and go get another shift lead job at McBurger Town making $12/hr and all is good.

Well, now BurgerQueen has an opening for a shift leader now that you left and they cant bring someone in at $10/hr b/c that's the minimum wage so they list the position as starting at $12/hr.

This will happen all across the whole job market and it will scale up causing an increase in all wages/goods/services/etc (up to a certain point of course) probably up to the $70-80k range and start to stall out/fall off. Due to 80% of the workforces pay/salary now being slightly higher the whole scale of money shifts (we call that inflation) and the people at the bottom are right back where they were if not worse off than before. Companies now have to pay their whole scale of employees more so now they have to charge more. The "dollar menu" turns into the "$2 menu" and your milk is now more because the truck driver gets paid more and all the workers that it takes to produce a gallon of milk now get paid more so......you get where this is going.

I only used a fast food worker reference.....and a very simple example, but the same will happen across the whole job market. Raising the minimum wage isnt as simple as just paying the bottom tier workforce more money....it will affect everyone in every aspect of the markets.

IMO its a simple minded fix to a very complex problem. The issue is wages and the economy at the bottom for workers is not growing in the same way the overall GDP and profit margains are. So the idea is, lift the bottom up with legislation. Doesnt work though, because corporations will just opt for the cheapest option which is usually just cutting back staff or replacing with machines. It also really doesnt help anyone who makes more than minimum wage with salary increases, and arguably de-incentivizes those skilled positions from working because if you had to choose between roofing or working at starbucks for the same wage, since starbucks "minimum" is now raised to roofing salaries--you would opt out of your harder position.

In a true capitalistic system things would adjust themselves to compensate according to value, but we do not have a true system like this. So imo the best way forward is just tax incentives for the working class

At the end of the day the min wage should match the cost of living. Why should someone work fulltime to get a salary that doesn't cover their living expenses?

min raise should be raised. we shouldnt have to subsidize the low paid labor forces of multinational corporations with medicaid, food stamps, etc etc.

Isn't the minimum wage in Australia already 20 something per hour

Minimum wage is a prevention measure from revolution. It’s only there to placate the masses from waking up to the truth

There was a big controversy here when a franchise called Freshii replaced the people who take orders with a live person, but they were outsourced on a screen from somewhere in Central America for $5 an hour instead of the $15 an hour here. You'll see more and more of this as well. Once robots come into play, it's going to change the game significantly for many types of employers. Imagine a construction site where all demolition is done by robots who work 24/7 and don't need sick days or to be paid. Or a robot who can roof a house or nail in flooring with zero mistakes or need for rest.

Minimum wage should ALWAYS be an incentive starting wage to gain experience and education for people who want more, not a place where people start and sit for years unless they are working part time or are say a senior who just wants spare cash. It was never intended to be a living wage IMO and anyone who thinks it should be is deluded.