Quote: (05-20-2015 11:38 AM)TooFineAPoint Wrote:
Employers don't pay wages based on what third parties think they deserve, they pay them based on how much profit that particular function/employee brings to the bottom line.
And, when the cost of labor gets too high, they either eliminate the position or pick up and move to an area of lower labor cost - whether it's Detroit or the US in general.
Businesses don't even pay what the worker is "worth". They pay based on what competing labor can be purchased for. It's no different than any other resource a company uses. If you suddenly make wood twice as expensive in one city, a builder will simply buy it in another city.
Economic truths can't be overturned because a politician "feels" like an employee should make more money. The only time that works is when labor is a highly inelastic resource and that's usually only the case with highly skilled labor - and they don't need to worry about this problem.
But that's the entire argument in favor of forcing companies like McDonald's to raise it...they don't have machines ready to replace labor (yet) and they can't move the job overseas. But you can't fool economics forever, McDonald's will either raise prices and lose business, close marginally profitable (now rendered a loss) stores in affected areas or figure out a way to automate those jobs.