I was working on new pricing for 2021 this morning for our products. I decided to plug in the effects of the new wages.
I took the increase in wages and looked at the effect on my company and then increased the equivalent percentage on raw materials, goods and services provided to our company at the equivalent increase. I then applied it to some common products.
The $15 wage (even though we already pay $17) will result in an additional 8% price increase.
My business is not so different from traditional model of 35 - 40% raw material content and the rest of the cost being labor and overhead.
That means the US economy not only should be looking at a price increase of 8% in the cost of US produced goods, but then also and equivalent increase by the distribution channels that will also be applied to their imports. Then you have to look at increases by the transportation sector.
Anyone that claims that a $15 minimum wage is not inflationary is just an idiot that should you should dismiss immediately. They have an agenda that is not pro-American.
Your cost of goods and services will rise immediately by a minimum of 11%.
A
study conducted by the bipartisan Congressional Budget Office (CBO) in July 2019 found that raising the federal minimum wage from the current rate of $7.25 an hour to $15 an hour, even if done incrementally over five years, would likely result in more than 1.3 million jobs lost.