> By increasing the wage to an arbitrary number ($15/hr), this ignores the market principles that each business operates under....Another thought experiment: why only $15? Why not $25? Or $50?
Don't these arguments apply any time the minimum wage is debated? I heard these same arguments in 2007, and the economy didn't implode (well, not because of the minimum wage). Why did we set it to $7.25 over $6.55? Why did we set it to $6.55 over $5.85? The minimum wage is already set, so the "market principles" have already been violated, yet the industry remains and is profitable.
> I think you underestimate how small margins are at most restaurants.... The principle applies, as you admit, that the cost increase would need to be passed onto the customer, who in a competitive business environment will likely chose the lower cost option over two products of similar quality.
No, I don't underestimate it. But I think if workers can't be paid enough to comfortably afford rent and healthcare then there should be no profit whatsoever. If someone is making a profit while someone else can't afford housing, then something is wrong.
I say set the minimum wage at a point that allows people some dignity, and let the market sort the rest out. Restaurants will set a price and customers will choose whether or not to pay it. Those restaurants that have a compelling menu at an acceptable price will prosper, others will fail and be replaced. Eventually an equilibrium will be reached as higher prices are normalized.
As a customer of restaurants, I can tell you I almost never care about price -- it's all about food and experience. I'm going to a restaurant later today and I'm going to pay 25% over the price of the meal so I can assure the waiter gets the cut they deserve. If that restaurant raises their prices 30-40% to pay their workers more, I will still eat there because I want the food and I don't want to cook.