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Comment by chongli | Hacker News Reader

less people are employed at a higher price of labor and that those priced out of the market are likely to be the ones hurt the most by it

I don't see how that follows. Imagine the minimum wage were doubled, do you think McDonald's would respond by laying off half their staff? What do you think that would do to their business?

Companies hire people because they need the work done, not because they have $X allocated to payroll and it's burning a hole in their pocket. If minimum wage goes up then payroll costs will go up, forcing them to either cut profits or find cost savings elsewhere.

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>Imagine the minimum wage were doubled, do you think McDonald's would respond by laying off half their staff?

No, but a person will definitely think twice before starting a new McDonald's franchise. A small restaurant owner who had been eyeing a second location will think twice about opening up another restaurant.

The incentives will also shift towards higher automation (not necessarily a good or bad thing in and of itself) of tasks as much as possible instead of hiring humans.

Companies don't work like this: "We have X amount of work to do, no matter what it costs". It's more along the lines of whether a project is a net positive (say through a net present value analysis) and if it isn't, then the whole project is scrapped.

In the end, I think we have to ask ourselves the question: should we as a society tolerate a situation where a big company like McDonald's or Walmart builds their business upon sub-living wages and uses our social assistance programs as a perverse subsidy?

If they raised the minimum wage 10% (not double, let's be realistic), it would raise McDonalds' incentive to eliminate a small percentage of staff.

Look at how supermarkets now have self-checkout. 4 self-checkout stations going with one employee monitoring, and customers don't mind using them. In fact many customers prefer them because they help them get out of the store more quickly. There's no reason to think that McDonalds won't eventually try to eliminate some of the staff that takes orders. It's just a question of when they'll be incentivized enough to try it.

B does not follow from A. Supermarkets did self checkout without any appreciable minimum wage pressures in the US. There is no evidence they won't do them, and no appreciable reason to think there's a floor on the price they can be implemented.

Which leaves us with a minimum wage in many areas which does not actually allow someone to survive, and a growing population who will end up on welfare anyway regardless (who usually are on welfare anyway because oh look Walmart's HR practices).

McDonald's is already working on self-serve options.

http://www.ctvnews.ca/business/mcdonald-s-canada-introducing...

That may be true for McDonald's, but most employers are small businesses with less than 50 employees whose profit margins are already small. Making it harder for small businesses to succeed hinders economic mobility and increases the wealth gap. If you enact public policy while thinking only of how it will affect the megacorps, then all you'll be left with are megacorps.

The most likely outcome would be that marginally performing locations would close because they are no longer cost effective to keep open. Everyone at these would lose their jobs. It might not be half but it would certainly be significant.

> If minimum wage goes up then payroll costs will go up, forcing them to either cut profits or find cost savings elsewhere.

More likely: they and their competition raise prices.

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