NationStates Jolt Archive

http://www.lewrockwell.com/ostrowski/ostrowski77.html


Thoughts?

Meh. heard that approach before. Never surprised to hear the stop taxing the rich and they will take care of everybody.

I wonder what James and company would say about retirement packages like the exxon CEO. 1/2 billion.......

There are studies that purport to disprove with statistics what economic logic tells us: the minimum wage causes unemployment. One study concluded that employment in fast food restaurants increased when the minimum wage increased. However, all economic logic says is that, all things being equal, the minimum wage will cause unemployment, or to put it differently, the minimum wage will lead to a situation in which fewer people are employed than if there was no minimum wage. Thus, we can say that, in the example cited, without the minimum wage, employment would have grown even faster. It is also true that an empirical study that showed that employment rose when the minimum wage was repealed would not definitely prove the theory because employment might have risen for some other reason!

So wait, the logic isn't supported by the facts, but it's the logic, so lets run with it...?

No sale.

Just skimmed through it.
Gotta love this bit:
One study concluded that employment in fast food restaurants increased when the minimum wage increased. However, all economic logic says is that, all things being equal, the minimum wage will cause unemployment.
So let's get this right:
Studies (and it is studies, not just ONE study btw) show that in real life min wage doesn't cause unemployment. Actual studies. Of real events.
The authors rebut this by claiming that 'logically' this shouldn't happen.
Therefore those empirical studies must be wrong.

Well, that clears it up then.


Studies have shown that gravity is the thing that stops us flying off into space. However, invisible spaghetti monster logic says that, all things being equal, little gnome creatures stick glue and velcro to everyone's feet when we're not looking.
Therefore all those empirical studies are wrong.

So wait, the logic isn't supported by the facts, but it's the logic, so lets run with it...?
Dammit, Cannot! First the 'Over-rated movie' thread and now this.
Are you in my head or am I in yours?!

Dammit, Cannot! First the 'Over-rated movie' thread and now this.
Are you in my head or am I in yours?!

I was about to post the same thing :eek:

http://img227.imageshack.us/img227/3679/maplfoeh7.jpg (http://imageshack.us)

How can one of the primary debates among political candidates be about 'taxing and/or imposing tariffs' against US companies 'going abroad' and yet we dare to be stupid enough to at the same time raise our minimum wage laws (and counter effecting any tariffs/taxes, which, by the way, have NOT been imposed) which help to ENSURE that more companies will search abroad? If we have no faith in the free market which built the strongest economy in the world, the let's just tear the whole damn thing down, I'm sure there are other countries (I listed a few in my title) that will take up the loose reins. Let's just force the hands of 'evil' business to feed the poor and downtrodden, rather than to make JOBS for the rest of us.
I can't believe so many believe that the minimum wage can actually help someone. It drives inflation and thus unemployment. Anyone remember the minimum wage raise of 1996? I do. The 'Happy Meals' which had been $.99 my entire life suddenly cost $1.29. Why? Because they passed the cost on.
The 'studies' done that found that fast food employment rates had gone up were during a huge economic burst, which had a new minimum wage law imposed upon it. Whether or not a hiring burst came at the same time is irrelevant, let us not forget that the new law was passed BECAUSE we were in a time of prosperity, not to cause it, but to profit FROM it.

So let's get this right:
Studies (and it is studies, not just ONE study btw) show that in real life min wage doesn't cause unemployment. Actual studies. Of real events.
The authors rebut this by claiming that 'logically' this shouldn't happen.
Therefore those empirical studies must be wrong.

Well, that clears it up then.

and achilles never catches that damn tortoise either

I say we should continue studies and examine the facts as fully as possible before concluding one way or the other. Despite the poor grammar in the post, a decent point was raised: the minimum wage was raised during a point where the economy was already booming ANYWAY, so it may be that we are drawing false correlations. Since the economy is not doing anywhere near as well nowadays as it was the last time the minimum wage was raised, let's see what happens when it's raised now. If the economy improves, it will be evidence enough to me that minimum wage laws work.

If you really want to help those on low incomes: raise the income tax threshold.

I can't comment on the US, Labour supporters in Britain continually go on about the minimum wage whilst totally ignoring the fact that the threshold has been falling (in real terms) for forty years and taxes have gone up and up.

Forcing employers to pay a minimum wage doesn't count for shit if it all ends up in the treasury, instead of in the pockets of the people who earned it, IMO.

What Determines Wages

Won’t greedy employers "exploit" workers and pay them starvation wages in the absence of a minimum wage law? This argument is self-defeating. It assumes that employers are motivated by self-interest, yet denies that selfish employers won’t bid underpaid workers away from other businesses. That is in fact what happens. If a worker who can produce $25 in gross revenue per hour for an employer, is only being paid $15 per hour, another employer will be willing to pay more. This bidding war will continue upwards to the $25 level. Employees will tend in the free market to be paid their marginal revenue product:

This is bullcrap unless you are in a situation with zero unemployment. When you do not have zero unemployment one company does not have to poach workers off another company, they just hire them from the pool of surpluss workers.

With any level of unemployment or skills surpluss this is what happens:

Two companies need a worker for the same job.

Three people apply to each of the two companies.

The companies each employ one person at the lowest wage the employee will accept - for poor people in high unemployment areas almost no money is better than actually no money - so the minimum acceptable will be pretty low.

There is no bidding between the two companies as they are not competing for more resources than their combined needs.

Look, I've actually read those studies (well, the one in question, the counter-study and the counter-counter-study).

They did have a few issues with sampling, but on the whole they were pretty good.

"Economic Logic" is a beautiful thing. There is nothing inherently wrong with it.

The economic logic that higher minimum wages cause involuntary unemployment is valid CETERIS PARIBUS.

You'd think people would remember their first year econ course.:rolleyes:

Just skimmed through it.
Gotta love this bit:

So let's get this right:
Studies (and it is studies, not just ONE study btw) show that in real life min wage doesn't cause unemployment. Actual studies. Of real events.
The authors rebut this by claiming that 'logically' this shouldn't happen.
Therefore those empirical studies must be wrong.
They (the author/s) claim that 'all other things being equal'. They might even be right, but if the theory they rely on to make such a claim (economic theory) is correct, then all other things will not be equal (a fact they neglect to mention).

If expendable incomes rise (as occurs with a rise in the lowest paid workers), then according to the same 'logic' they employ (economic theory) so will consumption. If something other than wages rise (say consumption) then all other things are not equal. So either they are reckoning on a false premise (that all things other than wages will be equal when wages rise) or economic theory is bunk, in which case disregard the lot.

What's the use of having a job with wages that are so low you're better off on public assistance?

You'd think people would remember their first year econ course.:rolleyes: i don't, it was at 8:30 and i rarely went, then i failed the first couple of tests so i dropped it.

What's the use of having a job with wages that are so low you're better off on public assistance?

When the minimum wage goes, so will public assistance, obviously. :/

http://www.lewrockwell.com/ostrowski/ostrowski77.html


Thoughts?

His premeses are, at best, insanely flawed. In some cases they are just contrary to fact. i.e. He's lying.

Minimum wage increases do not cause unemployment. It just doesn't. It doesn't matter how well you can argue that it would do something if facts say that it doesn't.

Workers productivity does not increase their salary. Coal miners are far more productive now than they were 30 years ago, yet their salary (adjusted for inflation) is far lower. An employee could make a boss a million dollars a minute, but if the boss can find someone else who's willing to do that job for 5 dollars an hour instead of 20 dollars an hour that employee is gone.

The idea that it's "just another special intrest," is disingenuous in the extreme. Special interests, in the derogatory sense, are interests that harm the many for the sake of the few. Increased minimum wages help everyone at an initial cost to a few, but with a payoff for even those few later.

This is bullcrap unless you are in a situation with zero unemployment. When you do not have zero unemployment one company does not have to poach workers off another company, they just hire them from the pool of surpluss workers.

With any level of unemployment or skills surpluss this is what happens:

Two companies need a worker for the same job.

Three people apply to each of the two companies.

The companies each employ one person at the lowest wage the employee will accept - for poor people in high unemployment areas almost no money is better than actually no money - so the minimum acceptable will be pretty low.

There is no bidding between the two companies as they are not competing for more resources than their combined needs.
So then you should create an economy with a labour shortage.

Western Canada has one now. Please come work here.

The idea that it's "just another special intrest," is disingenuous in the extreme. Special interests, in the derogatory sense, are interests that harm the many for the sake of the few. Increased minimum wages help everyone at an initial cost to a few, but with a payoff for even those few later.
I don't see how that follows. If I run a small business, an increase in minimum wage really really sucks for me. I don't see how my life improves later on.

What's the use of having a job with wages that are so low you're better off on public assistance?

Hey, even better, get rid of public assistance and then that low wage job will look pretty good!

I don't see how that follows. If I run a small business, an increase in minimum wage really really sucks for me. I don't see how my life improves later on.

This always presumes that small business' pay nothing but minimum wage, which is not true. But anyway...

If you read the whole post you'd realize that he answered that question, as minimum wage employees have more income, which can become disposable, thus they can spend money on things like what's available in small business'. AND, since the small business isn't paying EVERYBODIES minimum wage, just his/her employees, there are likely to be more minimum wage employees with more to spend then there are minimum wage employees s/he has to pay, so eventually it's a gain.

This always presumes that small business' pay nothing but minimum wage, which is not true. But anyway...

If you read the whole post you'd realize that he answered that question, as minimum wage employees have more income, which can become disposable, thus they can spend money on things like what's available in small business'. AND, since the small business isn't paying EVERYBODIES minimum wage, just his/her employees, there are likely to be more minimum wage employees with more to spend then there are minimum wage employees s/he has to pay, so eventually it's a gain.
Assuming I can stay in business that long.

Assuming I can stay in business that long.
Which is assuming that your business is so close to bankruptcy that you can't afford to shell out an extra $1 an hour to all your minimum wage employees.

Assuming I can stay in business that long.

You run a shit business if you can't absorb such a minimal increase in cost.

Assuming I can stay in business that long.
Yes, the assumption is that your business is viable, because if your business is not viable, then the existence/non-existence of a minimum wage isnt really an issue for you.

http://www.lewrockwell.com/ostrowski/ostrowski77.html


Thoughts?Ostrowski's a liar and an idiot who dismisses every study that contradicts his chosen point of view because it contradicts his chosen point of view, not because of any inherent flaw in the study. Next?

About the article, lots of for words for not much substance... Analysis is only microeconomics, The point of the law is to force everybody so a new standard of productivity/cost is set. On a close economy, is you say, raise every salary of 10%, you could assume you will get a 10% inflation meaning you did nothing. By raising only the lowest salary you try to improve there buying power by having the inflation also absorbed by the other one. The richest will buy less, poorest will buy more (very slightly I'll admit). He keeps talking about lost of balance, but the point is the price will rise with salary.

He keeps saying "Economic logic tells us that the minimum wage causes unemployment " but fail the bring good arguments. When he point other economies without minimum wage, which one? Most industrial country I know does have some minimum wage....


The argument of replacing them by higher paid worker is not applicable here since if it is valid from a macroeconomics point of view, in day by day reality salary is not a good indication of competence or productivity. Also a raise and some formation of your actual worker for the same price would probably do the same or even better if you can built loyalty.

The new technology argument also fails since from an economic point of view tech is good. You might fire low paid worker, but someone else will hire qualify worker to built/maintain your machine.

You could also claim that a raise of the wage will cause inflation targeted to specific industry (like fast food) which will become less appealing because of a reduction from the cost difference with other industry (High end restaurants), but again it will only cause a transfer of the labor/economy from low end industry to high end industry.

Economic is all about resources, man power, how you use them and of how you distribute the outcome

The only real argument I can see (from me) is international competition. Face it, business with low paid job usually compete with poor country who can set different standard of productivity/cost. But it mostly apply to the goods industry since services are harder to import.

I like is first two recommendations:


1. reduce their taxes
2. reduce their cost of living

It's basically saying, instead of playing with economy and risking shit lets make a collect and give directly the cash to the poor. But if you want such gift, you need to raise tax for richer and business

3. increase capital investment

This argument turns mostly about leaving people decide for themselves. But economically, whoever spend the cash (richer, business, government, poorer) the economy will turn... The point of have tax is exactly to lower to difference between rich and poor which most of time still come from who your born from.

i'll tell you in a few easy steps how to help a min wage person


get then to stop being so goddamned apathetic
send them to college.


more people in college=more $$$$$$$$

i'll tell you in a few easy steps how to help a min wage person


get then to stop being so goddamned apathetic
send them to college.


more people in college=more $$$$$$$$

:rolleyes:

i'll tell you in a few easy steps how to help a min wage person


get then to stop being so goddamned apathetic
send them to college.


more people in college=more $$$$$$$$

Pffft... There are too many people with college degrees working at a fast food joint. Here's a better way ;) :D

http://www.northernsun.com/images/thumb/0134JoinTheArmy.jpg

i'll tell you in a few easy steps how to help a min wage person


get then to stop being so goddamned apathetic
send them to college.


more people in college=more $$$$$$$$



Yes, because, all economic logic dictates that no one with a college degree ever ends up working for minimum wage, and that the only people who do are apathetic losers.

Sorry, you lose, but we have some lovely parting gifts for you. :rolleyes:

i'll tell you in a few easy steps how to help a min wage person


get then to stop being so goddamned apathetic
send them to college.


more people in college=more $$$$$$$$
Classic.

So then you should create an economy with a labour shortage.

Western Canada has one now. Please come work here.

:) Maybe one day - at the moment Scotland currently has a shortage for my qualifications - two days between sending out my CV and getting 5 job offers :D

But back to slightly more serious matters - it is a very hard thing to create an economy with a labour shortage - particulary a shortage of unskilled labour.

An economy with a labour shortage will drive away business and investors that are capeable of relocating to areas with a skills surpluss as it kills profitability.

This extends further than you might think - ast week in the papaers they were running a storey about shrimp (or some similar critter). The shrimp are caught off the coast of Scotland, they are then packeged in refrigerated containers and shipped to Indonesia where they are shelled. They are then repacked back in containers and shipped back to Scotland/Europe. This is cheaper than shelling them in Scotland.

Mild unemployment is actually very good for business as it drives wages down. And over employment is generally bad - it kills profitability. Companies with the ability to relocate their operations will try to move them to areas/countries with a less competitive job market.

This always presumes that small business' pay nothing but minimum wage, which is not true. But anyway...

If you read the whole post you'd realize that he answered that question, as minimum wage employees have more income, which can become disposable, thus they can spend money on things like what's available in small business'. AND, since the small business isn't paying EVERYBODIES minimum wage, just his/her employees, there are likely to be more minimum wage employees with more to spend then there are minimum wage employees s/he has to pay, so eventually it's a gain.

The thing is - a lot of small business sell things that people HAVE to buy, like food. When people NEED to buy somethign they will find a way to pay for it.

Small businesses that sell things that people do not have to buy tend to cater to a market a long way away from the minimum wage levels - raising the wage of the lowest 10% of the population will bring nobody extra through their doors if they sell products that cater for the top 25% or less.

The thing is - a lot of small business sell things that people HAVE to buy, like food. When people NEED to buy somethign they will find a way to pay for it.

Small businesses that sell things that people do not have to buy tend to cater to a market a long way away from the minimum wage levels - raising the wage of the lowest 10% of the population will bring nobody extra through their doors if they sell products that cater for the top 25% or less.
Those cats aren't paying minimum wage either.

And there would be an increase in 'just enough to get by' essentials to "oh thank god, we can actually buy what we need" essentials.

But really, we're stretching this pretty thin at this point with what they sell etc. without any statistic. It's fine to a point, but we're at what, our third 'assumption.' Two more and I think we're rating minimum wage based on what happens at Joes on the corner of 5th and Industrial.

I don't see how that follows. If I run a small business, an increase in minimum wage really really sucks for me. I don't see how my life improves later on.

In every area that has increased minimum wages locally the result has been an increased standard of living among the working poor, which results in increased spending. i.e. More business for those small businesses that hire minimum wage workers. It has been such an increase that it more than offsets the increased cost of hiring workers. They are literally investing in their own demand. It's like advertising. There's no actual benifit from advertising, except that business increases.

Assuming I can stay in business that long.

No assumption need be made. The findings are in. The overwhelming tendency is for business revenues to increase and for businesses to grow.

No assumption need be made. The findings are in. The overwhelming tendency is for business revenues to increase and for businesses to grow.

Don't 80% of small businesses fail in the first year or something like that?

i'll tell you in a few easy steps how to help a min wage person


get then to stop being so goddamned apathetic
send them to college.


more people in college=more $$$$$$$$

No it doesn't. There are a lot of jobs that the economy needs that don't require an education. I know people with degrees in computer science that haven't been able to get a job in their field for 2 years.

You're right about the answer being to get them to stop being apathetic, but they need to turn their efforts to increased bargaining power, not necessarily to moving them into jobs that have strong built-in bargaining power whose prospects will only go down the more people that look for them. Like computer science did.

You're right about the answer being to get them to stop being apathetic, but they need to turn their efforts to increased bargaining power, not necessarily to moving them into jobs that have strong built-in bargaining power whose prospects will only go down the more people that look for them. Like computer science did.
The barganing power is only useful if they are in an area with a labour shortage.

There is little bargining power in any negotiation where the guy you're asking for more money from can just tell you to stuff it and hire someone else if you choose to quit.

Unless by bargining power you mean by forming unions?

It's not as simple as it seems just playing with the numbers of supply and demand. There are some practical considerations that must be taken into effect.

In the United States it takes at least 180% of the minum wage to get a studio appartment in most areas, cover minimum utilities, and food. Clothing and transportation are somewhat unstable at best until you reach about 250-300% and can afford those things alone and probably a one bedroom apartment.

By the labor statistics the federal government releases, at least 35% of the working population can't afford to live on only one job, alone. That studio appartment is a bit of a luxery in some areas without a couple friends to share the rent (and up the appartment size so you can actually have room to live in with multiple people) or enough work to destroy your health - 80 hour weeks to survive.

Sixty percent of the population, as individulals, not households, makes less than 300% of the minumum wage, or a rough $30,000 before taxes. So to sum it up, a lot of people make less than $8/hr here and therefore don't qualify for even a studio appartment if they're alone. If you get under $10/hr you'll qualify in most areas, but once you actually factor in costs of living, you might have no means of personal transport or find it hard to get clothing (depending on region). Once you hit $12/hr, you'll be able to get by without much trouble in a one bedroom appartment, unless you're in some of the highest rent areas. It takes a job of $15/hr to guarentee you can afford a one bedroom appartment's rent in any area of the US and the other necessities of survival, and actually have room for maybe one dependant in there without much hardship.

So, am I in favor of increasing minimum wage and helping the lower income brackets somehow? YES! I like the idea of a country that doesn't require a multi-income household to survive.

It could easily be argued that a minimum wage would be beneficial to an economy. It just depends what state the economy is in. If an an economy is currently affected by underconsumption then a minimum wage would increase consumption. By virtue of poorer people not being as prolific savers and investors as richer people. Whereas the rich accumulate money for sake of accumulating money because it is a sign of success in itself. And so increasing ammounts of money get trapped within the stock market and are not involved in direct investment or consumption. So therefore of no use to the economy. For instance, if money is invested in a company, but the share prices drop. Where has that money gone? Or if the price increases, where will that money to fund the price increase come from if a share is sold?

Perhaps another way of increasing consumption is to decrease interest rates. The reduces the attractiveness of saving and increases the attractiveness of borrrowing. But therein lies a problem. What happens when you want to slow consumption? Increase interest rates? A lot of people will be hard hit depending on the average level of personal debt. Total personal debt in the UK has passed £1.25 trillion. The average household debt, including mortgages, is £50,918 (that's over twice the average adult yearly wage for the UK (£23k)). The average owed UK adults increased by £255 last month (equivalent to 1/8th their monthly income). Debt is a problem in the UK. So how do you keep the economy steady whilst reducing the rate at which people borrow?

What I don't understand is that economists seem willingly to accept the concept of the trickle down effect, but not a trickle up effect. Increased spending by the poor leads to faster to a faster money cycle which leads to increased profits and therefore returns from investment on the stock market.

Anyway. Blah. Wages and investment need to balanced to have a good functioning economy. One cannot out weigh the other.

The hallmark of good science is that it is backed up by empirical evidence. If the science doesn't match the reality, the science, not the reality, is wrong. Articles like this just provide more evidence - as if any were needed - that economics is not a science, and thus any conclusions drawn from economic theory should be taken with an enormous snort of salt.

The thing is - a lot of small business sell things that people HAVE to buy, like food. When people NEED to buy somethign they will find a way to pay for it.
Really? The place I buy my food is by no means a small business. When I think of small businesses, I think of the flowershop down the street, or little shops in the mall. You don't have to be rich to shop in either of those places, but if you don't have a little extra cash you won't shop there.
Also, with a small business selling food... if your customers can afford to buy a couple non-essential food items then that's still better for you. Perhaps they'll buy a litre of ice cream here and there or buy the nicer brand of soup.

Really? The place I buy my food is by no means a small business. When I think of small businesses, I think of the flowershop down the street, or little shops in the mall. You don't have to be rich to shop in either of those places, but if you don't have a little extra cash you won't shop there.
Also, with a small business selling food... if your customers can afford to buy a couple non-essential food items then that's still better for you. Perhaps they'll buy a litre of ice cream here and there or buy the nicer brand of soup.

I was thinking in the cases where big businesses are not present. A walmart across the road from the town greengrocers will crush that small business faster than any wage issues.

Flowers - kinda expensive - low income people are not going to be buying them often, or buying the expensive stuff. They get a lot of their business from people who are well away from the minimum wage.

As to the small business selling food - well - they could buy some more stuff.. OR now that they can afford a bit more you can raise the cost of the stuff they brought because they needed to.

The thing is - a lot of small business sell things that people HAVE to buy, like food. When people NEED to buy somethign they will find a way to pay for it.

Small businesses that sell things that people do not have to buy tend to cater to a market a long way away from the minimum wage levels - raising the wage of the lowest 10% of the population will bring nobody extra through their doors if they sell products that cater for the top 25% or less.
If you have a business that is catering for the top end of the market yet you are only paying your employees min wage, either you're grossly incompetent financially or you're a parsimonious miser. Either way, you shouldn't be allowed to run a business.

You really think that a shop selling Ferraris and/or Ferrero roche is going to pay it's people min wage?
You really think that a shop selling luxury items is going to have the same tiny profit margin as a shop selling basic foodstuffs?

Really, if that's the best you can do to bolster your side of this debate, I'd suggest you give up now before your arguments get any more contrived.

Which is assuming that your business is so close to bankruptcy that you can't afford to shell out an extra $1 an hour to all your minimum wage employees.
Many small businesses operate on very slim margins. Increasing labour costs by 20% is a big deal.

Many small businesses operate on very slim margins. Increasing labour costs by 20% is a big deal.
Either the business if efficient and therefore competitors are no better off and the cost will across the sector be passed onto consumers, or the business is inefficient which means either way it wouldnt last too long out there in the big bad world.

http://www.lewrockwell.com/ostrowski/ostrowski77.html


Thoughts?Oy, the contradictions in the article. First it says "Can’t employers keep such workers on the payroll and simply shift the cost to their customers in the form of higher prices? Economist Walter Block says no:
It is my view that in equilibrium nothing will be shifted onto consumers."

Then it says "First, since fewer laborers are now employed, aggregate production will be reduced and overall prices will rise, driving down real wages and incomes of consumers."

Which is it? Will prices rise or won't they? If they're going to rise, then why can't they rise corresponding to the minimum wage?

Then, it says "The minimum wage sets a floor against which they can begin negotiations for union wages. It also eliminates competition from lower-skilled workers."

Which is contradicted by "That is in fact what happens. If a worker who can produce $25 in gross revenue per hour for an employer, is only being paid $15 per hour, another employer will be willing to pay more. This bidding war will continue upwards to the $25 level. Employees will tend in the free market to be paid their marginal revenue product" and "The winners are:
more highly skilled workers"

If the worker is highly skilled, then the worker's marginal revenue product will be higher than the minimum wage anyway. They wouldn't need the minimum wage increase because they can negotiate for higher wages without competition from lower skilled workers.

i'll tell you in a few easy steps how to help a min wage person


get then to stop being so goddamned apathetic
send them to college.


more people in college=more $$$$$$$$Are you willing to pay to send me to college? I'd be happy to go.

By the labor statistics the federal government releases, at least 35% of the working population can't afford to live on only one job, alone. This brings up a good point. If the minimum wage is increased enough, then perhaps these workers can quit one of those jobs. This will leave an opening for a worker who has been fired from minimum wage increases (if there are such workers) to take.

Many small businesses operate on very slim margins. Increasing labour costs by 20% is a big deal.
Which is assuming that each and every employee in your hypothetical business is being paid min wage of $5/hr.
Not even McDs does that.

As already stated, if your profit margins are that tight you are forced to pay every one of your employees just $5 /hr, you're not going to be in business very long. If giving everyone a $1 /hr payrise sends you bankrupt then pretty much anything will.
Wholesale product price increases will do it.
Transport costs rising due to petrol price increase will do it.
Rent increases will do it.
Change in consumer tastes will do it.
Overstocking, leading to selling at a loss will do it.

So why only argue that a min wage rise will send your business bankrupt? At the level you're presenting, everything would.

Studies have shown that gravity is the thing that stops us flying off into space. However, invisible spaghetti monster logic says that, all things being equal, little gnome creatures stick glue and velcro to everyone's feet when we're not looking.
Therefore all those empirical studies are wrong.I am bumping this thread to announce that this is my new sig.

If you have a business that is catering for the top end of the market yet you are only paying your employees min wage, either you're grossly incompetent financially or you're a parsimonious miser. Either way, you shouldn't be allowed to run a business.

You really think that a shop selling Ferraris and/or Ferrero roche is going to pay it's people min wage?
You really think that a shop selling luxury items is going to have the same tiny profit margin as a shop selling basic foodstuffs?

Really, if that's the best you can do to bolster your side of this debate, I'd suggest you give up now before your arguments get any more contrived.
Catering pays total crap to the staff. (Silver service waitering at high quality events)
I can vouch that Harrods also pays total crap to it's staff.
Retail Jewellry shops in general pay crap to their staff.
Bar work pays crap to it's staff. (note - in the UK Bar staff rarely get tips).

They may not pay absolute minimum wage, but the amount you get paid in no way reflects the revenue you generate for the company (commission based jobs excluded), and in many cases if you work in retail you will be on about the same pay wether you work in Tesco or Harrods.

If you think that a company will pay it's relatively unskilled and easily replaceable staff more just because they make more money then you live in a fantasy land.