Originally Posted by
Illusions
We can do this real quick I guess, using easy numbers. Say you have a retail store with 15 full time (hah!) employees making minimum wage. At 15 employees, for 8 hours each, and $7.25 per hour, thats $875 total for employee pay per day. Now lets pay them $10 per hour. That would be $1,200 per day, or a $325 increase. So lets say this hypothetical retail store makes $10,000 per day in sales (not profit). To cover the $325 increase in costs to pay the employees $10 per hour instead of $7.25, and keep the same profits, the store would have to increase the cost of an item by 3.25%. So for every dollar an item costs prior to the pay raise, your customers would be paying an extra 4 cents (I rounded up significantly from 3.25 cents) afterward. If someone wants to correct my math, please feel free to do so. This is just to illustrate that the higher costs aren't that significant towards the customers. However, something else this illustrates is that if a company wanted to charge an extra 4 cents on the dollar for a product and not increase employee pay, they'd be looking at an extra $118,625 per year, per store. They could then either roll that into an extra 16,362 hours of work paid at minimum wage for additional employees, or hire 7 additional full-time people at $15,080 per year ($7.25 per hour x 40 hours x 52 weeks), and still have money left over. What is more likely though is that extra money will just be kept by the company, since with larger retail chains, with thousands of stores, that extra money could be multiple hundreds of millions of dollars.
Edit: We're going to overlook that most retailers keep pay competitive within their own field, so employee minimum pay may start at something like $8 per hour or $9 per hour in states that have much higher than Federally mandated minimum wage. While this is not a living wage in most areas, its marginally better than $7.25 per hour.
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