The dynamic around raising the minimum wage has been “it’s the right thing to do for people” vs. “it’s the wrong thing to do for the economy” since forever, but it’s actually the right thing for both.
Businesspeople only look at raising the minimum wage as “but I have to pay 25% more in labor costs and that’s horrible!”
But they aren’t looking at the bigger picture: the more wages go up, the more they make.
What I mean is that too many businessmen of this generation look at their wealth as an island that sprang from the middle of the ocean and is totally isolated. Any efforts to increase wages and/or taxes are seen as foreign invaders come to r*** the women and burn the houses. And so they are inherently, overwhelmingly hostile to these things.
They wouldn’t be if they understood the economy more as it actually is which is an interconnected web.
If you own a clothing store that sells nice jackets, but you drive your wages down to where your own employees can’t afford to shop there, then so does the next store and the next because they no longer have to offer competitive wages. Ultimately, this means the wages in your area are depressed across the board, and that costs you customers because people don’t have that 25% more they would have to spend money—and that is THE discretionary income for most Americans.
By keeping wages ridiculously low (the starting salary for a millennial was less than for baby boomers when adjusted for inflation) you are inadvertently killing businesses much more than if you give people the first minimum wage increase in 20+ years.
“Gig” workers and the contractor economy is also ridiculous and in need of serious overhaul for some of the same reasons.
Weirdly enough, a lot of the same small businesses that fight wage increases don’t realize (or don’t care) that they are killing their business long term. A small store can’t compete with Target on pricing, and since people don’t have that extra 25% to buy things with, they are forced to shop at huge corporations that offer discounts.
By not thinking of the economy as a web–and by not thinking about anything other than the next quarter–businesses that believe they can keep wages artificially low forever are unknowingly dooming themselves.