http://www.cnbc.com/2016/01/27/franchisees-fight-back-against-15-wages.html
Seattle recently raised the minimum wage requirement to $15/hour. Franchisees have brought suit claiming that the new legislation unfairly burdens them, and that they should be recognized as small business owners. As cities seem to be enacting laws that make minimum wage higher than the federal minimum wage ($7.25/hour), it will be interesting to see the effects. The standard claim against raising wages argues that employers will lay off or not hire as many employees. One market study in this article found that hotels would actually pass the cost over to consumers by raising room rates. Generally speaking, I am inclined to think that companies will not let this effect their bottom line, whether that means less employees or passing the costs to consumers, I’m not sure.
Raising the minimum wage to an amount that is no longer “affordable” to companies won’t help the employees and won’t help the public. Businesses are unlikely to bite the bullet and let the wage increase change their bottom line. Either they will figure out ways to have less employees to make up for the difference, or they will raise prices and pass the increase along to consumers. Unless businesses bite the bullet, the wage increase is likely to do more harm than good.