So instead of having a livable minimum wage, you pay people under a livable wage, then tax the business/business owner and use that tax to pay food stamps to the worker. Makes way more sense! /s
> What does a business do? In a real competitive environment you can't have your expenses go up by $24K per month and simply raise your prices. It doesn't work that way at all.
> If you source materials and services from other US-based companies and all of them see their wage costs go up by 25% you can bet some of your costs will go up.
I thought companies couldn't raise their prices? So pick one, either prices go up or costs don't.
> So instead of having a livable minimum wage, you pay people under a livable wage, then tax the business/business owner and use that tax to pay food stamps to the worker. Makes way more sense!
No, that makes zero sense. You are assuming the business owner is evil and rolling in cash when the case is exactly opposite.
Costs are costs. Even taxes. If a business makes $100K at the end of the year and government takes $90K of that in taxes that business has no money to hire people, expand, innovate or survive market downturns. We can't just grab money from people and expect no consequences.
I suggest to fire-up a spreadsheet and run through some calculations because, if you are serious about the above, your view of how things work is quite distorted.
> I thought companies couldn't raise their prices? So pick one, either prices go up or costs don't.
There is no universal law. It all depends on the competitive environment a particular business inhabits. Some have no way to raise prices. Others do. I think I can say that the vast majority of products you find at places like Walmart or BestBuy come from companies who have nearly no freedom to raise prices. Competitors kill each other on margin and there's no room to go up.
I'll give you an example of a company that has some room to increase pricing: Storage companies. This just happened to me. We have a 10 ft x 30 ft storage unit full of business equipment. We started a few years ago paying $285 per month. I just got a notice that it's going up to $340.
When the cost of switching suppliers (or the pain) is such that the customer is kind of stuck the supplier has some room to climb. When mobility is easy and competition is plentiful there is no flexibility.
The example I concocted in post you referred to mentioned that a business might have suppliers who raise prices. This is possible for a certain class of products within limits. For example, if one of the components being purchased to manufacture a product is single source (there are no substitutes) they have the ability to raise prices within limits because the buyer has nowhere to go.
So, yeah, it's a dynamic and variable landscape but the vast majority of businesses in reasonably competitive product segments have no freedom. In fact, in most cases they are under downward pressure.
Here's an easy exercise to confirm this: Go to Amazon and search for any household product. I don't know, forks, plates, screwdrivers, light bulbs, trash cans, toilet cleaner, etc. You will get thousands of results with products within the same price range. Anyone outside a certain range isn't selling well at all. That's just reality.
> What does a business do? In a real competitive environment you can't have your expenses go up by $24K per month and simply raise your prices. It doesn't work that way at all.
> If you source materials and services from other US-based companies and all of them see their wage costs go up by 25% you can bet some of your costs will go up.
I thought companies couldn't raise their prices? So pick one, either prices go up or costs don't.