Nobody's labor is worth as little as $5/hour. That's not a living wage anywhere in the US, and as a result it borders on slave labor to hire people for that little. The high price for small businesses is, however, a more realistic problem.
You make two assumptions with your comment. One is that everybody making minimum wage is supporting a family of four. I have sympathy for those people. Pricing them out of a job, however, is simply cruel. They need to increase the value of their skill with experience or education. And what better way to do that than to make less than they want for a period of time so that they can build up one or both of those.
Which brings me to your other assumption -- people who make a low wage will always make a low wage. I now make many times over that $4 per hour. That job enabled me to get another job which enabled me to get another job, etc. I wasn't doing what I do now, but every job had in common the attribute that I had to make myself worth what I was being paid, whether that's $4 per hour or $100. Every day I use experience gained at each of those jobs, even the most miserable ones.
There was a story on HN a while ago about a guy with an MBA who now works at Publix. He had been laid off and claimed that he wanted to teach his sons that work was dignified no matter the job. I believe he was being paid $8/hour or so. Publix has no choice but to pay him $8/hour because he likely can't do a much better job at bagging groceries than the 16 year-old next to him whose labor has been assigned that value by politicians who have never run a grocery store. If Publix wasn't forced to pay the teenager a higher wage than he's likely worth, Publix could either hire more teenagers and reduce everyone's workload and provide the customer a better experience, or they could pay the teen $4/hr and the father $12/hr.
That may enable the father to work there a little longer only to discover he is next in line for management because of his experience. His wife is thrilled that he's not traveling the world anymore eating out. And who better to run the store than someone who has been at the lowest level? Is the teen a slave at $4/hr? No, because he can walk next door to Kroger and see what they pay. Maybe it's $4.10. He decides to stay at Publix because he's already decorated his locker and made friends with the older guy who has great stories about traveling the world.
Businesses will determine quite well what their labor is worth and doesn't need USG to do it. Workers will determine quite well what corners they are willing to cut when times get hard. The latter may find that getting out of bed for a crappy, low-paying job enabled them to find a better opportunity.
There is a lot of trivial work to be done that isn't worth rent+food+utilities+... There are things I'd pay someone $5/hr to do but not 50% more than that. It's a huge gap.
At one point in history, Luxembourg had the highest unemployment, largely due to the $10/hr minimum wage, which was the highest in the world at that time.
I think it's more a moral belief that anyone who works ought to be able to support themselves by doing so.
$22.50/day or $8,218.13 per year in expenses. At $5/hr, you are making $10k a year for a full time job w/ 2 weeks vacation.
FYI a single ride on the bus/light rail in the Bay Area (VTA) costs $3.75.
Sources: I lived on < $10,000/yr for quite a while.
It should be noted that I am not advocating reducing (or increasing) minimum wage. I think that the issue that people try to address via minimum wage is a clusterfuck of an issue that won't really be solved without a pretty large paradigm shift in how people acquire, or are provided with, their food and shelter.
The distinction becomes particularly clear when you consider societies of one-- e.g. a castaway. If he wasn't industrious enough, a castaway could clearly work in a way that wouldn't guarantee sufficient food and shelter. Ergo it is possible for work to generate less wealth (= be worth less) than would guarantee food and shelter.
I think what you mean to say is that if people can't generate enough wealth to cover certain minimum requirements, the rest of us should make up the difference. And I don't think anyone would argue with that general principle.
According to new numbers from the Labor Department, in 2008 only 1.1% of Americans who work 40 hours a week or more even earned the minimum wage. In other words, 98.9% of 40-hour-a-week workers earn more than the minimum. The data also show that teenagers are five times more likely to earn the minimum wage than adults.
http://online.wsj.com/article/SB1000142405297020344010457440...
So the people who are most affected by changes to the minimum wage are teenagers who aren't paying for food and shelter, but looking for disposable income.
Ergo, cutting the minimum wage won't be a boon for new jobs nor will it be cutting anyone's standard of living.
> Ergo, cutting the minimum wage won't be a boon for new jobs nor will it be cutting anyone's standard of living.
Not so fast.
Many of those teenagers are learning to work, which makes their future labor more valuable. If they don't get such skills, they'll never be worth employing.
Also, some of those teens are contributing to their household's income.
In other words: higher minimum wage = higher prices = higher 'cost of living'
As a thought experiment, would you support making the minimum wage $1000/hr. If not, why not?
Honestly, the concept of a 'minimum wage' is one of the stupidest things I can imagine.