Reply to Help me understand the impact of a $15 minimum wage?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]The cost will be passed along to the consumer so the companies can keep making a comparable profit. In some states, the labor input to the price of goods will more than double. Some small businesses will not be able to stay in business because fewer people are willing to spend $7 on an ice cream cone as opposed to $4.50. My family is lower middle class and I know we will have to cut back on things like that if prices go up because our budget is very tight.

I do support an increase in the minimum wage but there are definitely costs. [/quote]

Your math misses the mark, in part because it is the very rare industry where minimum-wage labor costs make up the bulk of costs of production.  To use your example of the ice cream cone, let's say I run an ice cream shop.  During a moderately busy time of day, I have two employees working who each earn $7.50 an hour.  I sell about 20 ice cream cones an hour at your $4.50 price per cone.  If I have to double my employees' salaries, that means I'm paying approximately an extra $15 per hour in labor costs.  Spread over 20 ice cream cones, that's an increase of only 75 cents per cone without affecting my bottom line.  If I'm marking up labor costs at 100% in setting my price per cone, that's still an increase of only $1.50 per cone, not $2.50.  I don't have to mark up the labor increase that much if I'm concerned it will negatively impact demand for my ice cream cones, 75 cents is enough to cover the cost of a $15 minimum wage.[/quote]

labor is known but sales are variable. You are not considering the situation where I'm not selling anything but still paying the higher wages. My burn rate is higher which means my business is less viable.[/quote]

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