A $10.10 Minimum Wage Would Have NO Effect on Inequality & a Negative Effect on the Jobs Market as well as the Prices People Pay for Goods and Services.

As of 6/18/2014, the labor force participation rate is 62.8%; the lowest of any reported number since 2004 according to the BLS.  This means that as a percentage of the population there are fewer working people than at any time since 2004.  Rather than spur job creation, it is simply illogical to make labor more expensive.  To say to businesses that hire workers to wages between the federal minimum and $10.10/hr “You are forced to give everyone a raise and hire new employees at that level as well” forces those businesses to make difficult choices.
On the small business side, the business owner must raise their prices or cut the total amount of hours worked by employees.  A small business raising prices for the goods or services they provide hurts their bottom line, as there is no justification for the increase when viewed by their consumers.  Whether or not they had to pay their staff more should be irrelevant to a consumer choosing whether or not to purchase a specific good or service.  The small business is forced to say “here are the same goods with higher prices and there are no changes to these goods or services to justify the higher prices”.  Consumers who do not absolutely NEED these goods or services will simply stop buying them in the long run.
To avoid increasing prices, the other option is for ownership to cut the amount of hours worked by hourly employees.  It may mean that the owner takes a more active role in accomplishing tasks that would otherwise be handled by an hourly employee or that some are outright fired.  Small businesses have hired me to make their workforces more efficient and save time and hours as well.
Large corporations that have large hourly workforces have to meet Wall Street expectations of earnings and margins to keep their shareholders satisfied, otherwise suffer a decrease in the price of their stock, which reduces their amount of cash on hand to develop new products as well as refine currently existing products and factors of their production.  Using Apple as an example; if Apple did not have billions of dollars in cash on hand, they would be unable to recruit and retain the absolute best of all talent to create the iPhones and iPads we all use today.  They would also be unable to acquire outside companies they see as potential competitors or developers.  Apple did just pay roughly $3,000,000,000 to acquire Beats.  Without making the margins that they do, they would be unable to do these things.
Unfortunately for small business and large corporations alike, the need to spend more on labor means that they will not have excess to spend on R&D to improve the quality of products and services or on their facilities.  To small businesses have owners that directly earn a living off of the profitability of their businesses, a decrease in profitability to a certain level (different for every business) would eventually push small businesses out of the marketplace entirely.
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As of the end of 2012, 1.6 million American workers were working hourly for the federal minimum wage.
Making a large regulatory shift in wage that would have all of the consequences named in the paragraphs above to benefit only 1.6 million American workers (1.1% of the total workforce) is simply not worth it.  Having an economic policy that encourages job creation instead of raising the price of labor is the right solution.  It does not require calculus to understand that as the cost of something rises, the demand for it drops.  Government wants to raise fuel and energy prices so that people use less of it in the name of environmentalism.  They do so under the logic that says if we make energy expensive people will use less.  Yet people who support raising the minimum wage seem to think this does not equally apply to labor; unfortunately it does.  If you raise the cost of labor, less of it will be desired.
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Out of those 1.6 million earning the minimum wage, 484,000 of them were age 16 to 19 years old.
Giving a raise in hourly wage to laborers age 16 to 19 will only serve to raise prices around them, which would eat up their raise.  The problem is that they did nothing with their skills overnight to justify the increase in wages for their services.
An out of work adult that sees the value of their labor above $7.25 may see $10.10 as worth it.   Adults, by virtue of having more days on this earth have more life experience and maturity than people in their teenage years; are also more likely to have a need for the income if they were previously let go from another job.  Teenagers mostly take these jobs as first jobs.  Adults with previous work experience are also more likely to produce a track record of showing up on time and handling customers more maturely.  Minimum wage hourly jobs almost never require possession of a specific skill going in, the jobs can be learned.  Adults who have learned on the job before and have a reference are more likely to be hired than a teenager whose only reference is mom or dad.
BOTTOM LINE:  A business owner (regardless of size of the business) would be more likely to hire an adult over a teenager, I would advise any client of mine to do the same.
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Of all hourly workers only 4.7% were working for the minimum wage or lower. 18.5% of that 4.7% work in hospitality (food service).
Workers who have jobs that depend on gratuities have hourly wages tied to the expectation that for their good service they will be rewarded with a tip.  These jobs are in most cases temporary or second jobs, hardly ever careers.
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With all of these things clearly explained, why would the political left be pushing so hard for something which would have a negligible impact on one of the things that they claim to care about most?  The only solution I can muster is that it is a form of payback to the youth of America that voted so heavily in favor of President Obama.  The youth voted D in 2008 and was awarded a reduced burden in the healthcare market being able to stay on their parents plans until 26.  This minimum wage push could potentially be a form of payback to the youth for voting D again in 2012.
The second thing to look at is why the minimum raise wage advocates do not push for the minimum wage to be $50 or $100 per hour?  They cannot, they know that the more they use regulation to push the free market, the larger effects will be.  Instead they push for small negligible changes that help almost no one just to say that they are doing something.  It seems that coming up with meaningful job creation policy is more difficult than demonizing anyone who disagrees with them.  While it is true that there are some that work for this wage that truly have no other job or choice, raising this wage will result in their government issued gains being eaten by taxes and increases in prices around them.
Any forced increase in wage will raise costs of labor and prices, regardless of how large or small it is.
Sources cited below.
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