Setting the minimum wage at a living wage of $10.50 would have devastating economic effects according to the document. It would likely lead to dramatic inflation as businesses pass on costs to consumers. Many small businesses would be unable to absorb the increased labor costs and may be forced to cut staff significantly or close down. Previous examples that raised minimum wage substantially, such as in Santa Fe, New Mexico, resulted in major job losses as high as 16% increased unemployment. Large increases in the minimum wage could eliminate hundreds of thousands of jobs nationally according to congressional reports.

1. The minimum wage should not be set at the level of the living wage, $10.50 an hour in Lewisburg. Lindo Jones, Sean Fortney, and Benjamin Schrock

2. Definitions The minimum wage should be set at the level of the living wage, $10.50 an hour in Lewisburg. -Minimum Wage- The lowest payable to employees in general or to designated employees as fixed by law or by union agreement. Set- to fix the value of a certain amount or rate. Level- an extent, measure, or degree of intensity. Living Wage- an above market wage high enough for the worker and family to remain healthy and comfortable.

3. How is Living Wage Calculated -Federal poverty level -Single person is $9,300 -Fair market rent for the Area -472.00 for one bedroom apartment -Family budget and self-sufficent standards -1 parent 1 child income $25,537

4. Devastating Economic Effects -Dramatic Inflation -Destroy small Businesses -Employment devastation

5. Dramatic Inflation Inflation- A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money Cost-push inflation- A phenomenon in which the general price levels rise due to increases in the cost of wages and raw materials.

6. “I can only raise the prices so much”: over $300,000 in cost

8. Inflation Vs. Minimum wage inCreases in in Ontario

9. Why does it matter? Consumer spends more money: is it really an increase at all? If the increase changes at such a significant rate: ($4.00 in a day), disastrous outcome (hyper inflation) - little or no buying power in world market

10. Small Business Eradication When labor cost rises: business has three choices Adjust employment rate Raise prices Absorb the cost Big business has better chance absorbing the cost: small business does not. For example: small increase of $1.60 per hour would cost a bake shop with ten clerks and bakers over $30,000 per year

12. Over 20% said they will not be growing their staff as planned prior to the minimum wage increase.

14. Ninety-eight percent of the restaurants raised prices,

15. eighty-nine percent raised prices significantly.

16. Fifty-four percent of restaurants reduced the number of employees

18. A $1.82 increase will result in an additional $4,300 payroll per month.

20. Devastating Unemployment Negative effects that is would have on employment in our economy. Some of these cities that have tried a. Santa Fe, New Mexico b. Chicago, Illinois

21. Santa Fe, New Mexico June 24, 2004 the Living Wage Amendment became law in Santa Fe, NM 1 . Santa Fe’s ordinance raised the wage floor from $5.15 per hour to $8.50, 2. This is a 65% increase at one time.

22. Santa Fe, New Mexico Scheduled pay increases: a. $9.50 on January 1, 2006 b. $10.50 on January 1, 2008 c. And will be indexed to inflation starting on January 1, 2009

23. What effects did this have on the cities? Santa Fe, New Mexico 4 . The minimum wage increase caused the loss of approximately 540 jobs. This was a 16% increase in the unemployment rate. 5. As of January 1, 2009 the minimum wage was set to $9.85

24. Who Does This Effect? Santa Fe, New Mexico: 1. Those with 12 years of education or less suffered an extremely large and negative effect 2. Individuals that where able to keep their jobs found their hours reduced 3.5 hours on average per week.

25. What effects did this have on the cities? Chicago, Illinois 1 . This was presented to the Chicago City Council in July 1996 calling for a 79% minimum wage hike 2. The city estimated at least a 1,300 job loss as a result of the ordinance

26. Continued effects this had on the cities Chicago, Illinois This ordinance would cost the city nearly $20 million per year! a. $4.2 million would go to the administrative costs of certification, monitoring, and enforcement of the ordinance. b. This $20 million would require a permanent tax increase on all citizens of Chicago.

27. What do minimum wage hikes do on a larger scale? In 1998 California increased minimum wage by 60 cents The results were 1. 25,000 job loss 2. $230 million lost in annual CA worker income 3. $790 million in annual CA labor costs increase

28. What do Congressional reports say?Minimum wage increases cause unemployment

29. Why Does This Matter? The unemployment can be easily tipped, creating a Ripple effect! High employment costs can lead to large companies to start Outsourcing. The Congressional Budget Office (CBO) estimated that a $1.34 increase in the minimum wage would cost approximately 250,000 to 500,000 jobs to be lost

30. Questions?

31. Conclusion “The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.” – Milton Friedman -Dramatic Inflation -Destroy small Businesses -Employment devastation