the logic is (which many economicist agree with) that if you make more money you will spend more money. Maybe not at your place of work but you will spend more money. So business will find the money the same place they always find money, from customers who will now be spending more.
But as I said in my post, there are certain areas and types of industry where this just isn't the case. Areas that rely on student trade for example, many of whom don't work.
hardly anything is universally benefitting everyone and everything
But what you have to weigh up therefore is whether the benefits to some outweigh the cons to others. I'm sure they do, but i'd like to see some stats in a couple of years looking at how this huge increases affected small businesses. I just don't see this as being conducive to our recovery, we need small businesses and this increase certainly isn't pro-small business.
yes because that's how capitalism works. Companies always pass on higher earnering to their employees. Everyone remembers during the roaring twenty's in American when the rich were just raising wages like nobody's business. It happens every time and by that I mean it has never happened in all human history.
A firm will never pay what they can afford. They will pay the bare minimum amount physical possible in order to make a larger profit. That's capitalism.
They do in some cases. Though the firm's main prerogative is to maximise shareholder profits, not staff welfare, so it is understandable that they don't. Though there are some notable examples of this not being the case, take a look at Google for example. Their HR policies are legendary, though they are of course not the norm...
if they offer too little people will then leave to go to the job across the street were they are again offering too little. They shall then return to the first job and find the jobs have been taken by people even more desperate them then. As everyone is desperate and living on low wages they can no longer strike without starving or losing their job. Thus they can't fight for a wage increase and will live the horrible lives that market has provided. Meanwhile the rich will be having 10 course meals and toasting to ridiculously large profits.
I'd disagree with this actually. I'm not saying firms will pay the most they possibly can, but it is in their interests to keep staff turnover down, hiring new staff has a cost and the quality of the service provided often decreases if you have a high staff turn over. Firms want to keep employees as they have invested money in their training and so it is unlikely they'd offer a rock-bottom wage, forcing staff to leave. If a firm is paying too little and all their staff walked at the same time, they'd be paralysed. Staff always have some degree of power. Unions didn't just spring up, they evolved when staff realised that if they worked together, they did have a large degree of power over their employers.
Firms will naturally increase their wage in a free market, but they will do it when they are ready and can afford to do so. It is in their interests to do so in order to keep their staff and attract better, more highly trained individuals. The issue here is that we are having a raise in one year equivalent to the last 6/7 years' of increases, firms are just not ready for this and I think we'll see small businesses suffering.