Progs like to push the Minimum Wage as a way to reduce income inequality:
“It will reduce inequality. The question is how much and for whom. It’s not going to have a huge impact, but that’s because there’s no politically feasible policy that would have a big impact,” said poverty and fiscal expert Isabel Sawhill, co-director of the Center on Children and Families at the Brookings Institution.
As the above article points out, increasing the Minimum Wage would not narrow the gap between the “one-percenters” and those making the Minimum Wage:
Consider the 5-figure paycheck of a janitor versus the 8-figure salary of a CEO. Raising the minimum wage to $10.10 from $7.25, as a leading proposal in Congress would do, wouldn’t narrow that chasm.
There’s also a big gap between those making 6-figures and the bazillionaires at the very top. A higher minimum wage can’t touch that.
What a higher Minimum Wage will do is tilt the balance between labor and automation in favor of automation. If the cost of hiring a teenager to sweep the floor gets too high, the owner will just buy a Roomba. On larger scales, except for Oregon and New Jersey, you just don’t see full-service gasoline stations any more. The Minimum Wage is too high to hire grease-monkeys. There are self-checkouts now in major grocery stores. Baggers? Fuggetaboutit.
The paradox is, the higher Minimum Wage goes, the higher productivity goes. Machines replace manual labor, so the productivity per remaining worker increases. Of course, the remaining workers do not see any commensurate increase in their wages. Why should he? He’s not the one putting his money down to buy the machines. The owners are. If a plowman could plow one acre a day walking behind a mule, and his employer buys a tractor with which he can plow ten acres a day sitting down, will his employer pay him ten times as much? Of course not. He might even pay less, because the work is not as difficult.
The result of a higher Minimum Wage, then, is fewer people employed and higher productivity, with the benefits of the higher productivity going to the owners.
Who are the owners?