I'm curious what law of economics you're citing to arrive at this. In what way does raising the minimum wage automatically increase the purchasing power of the middle class?
It would be nice if that's all it took to increase purchasing power, but it's not anywhere near so simple.
If anything, raising the minimum wage can drastically decrease the purchasing power of the middle class (and everyone else for that matter) and the reason why is pretty simple. When you're already making above minimum wage and a new minimum is set, your wage above it does not automagically jump up to a level the same amount higher than it was in relation to the new minimum. In fact, in many cases, you could have just seen your old wage that was above minimum reduced to the new minimum.
Example: person is making $10 above minimum, and the new minimum is raised by $5, that person is now only making $5 above minimum. It'd be great if everybody's boss would go "And now I'll just raise everyone to the same level above minimum they were before, cause I'm just so benevolent!" but we all know that's not even remotely likely in most cases.
God damn it! I had a reply, with links, and the damn forum went down:|
Anyways.
First point; we don't quite know what the poster was referring to when he said "working class", every class works so did he mean the working poor? The middle class? Or something else.
Second; there is no correlation between minimum wage and inflation (in fact if we look at two different periods of time, one where minimum wage was raised every year and one where there were no minimum wage increases, there was less inflation, CPI, than when no minimum wage increases occurred). Even that statement can be debated so it's not proof of the opposite of your claim.
Lastly there isn't a correlation between minimum wage and business profitability.
So what does this have to do with your statement? Well, it's shows you are wrong in your assumptions, however, I have yet to see data that proves the original posters point either.
If someone could find a wealth distribution chart by year we could compare it to the years were minimum wage was raised to see if there is any correlation. The chart would need to be broken down by various percentiles to see how the middle class is affected by increases in the minimum wage.
Common sense (which honestly doesn't mean shit) says that if your primary demographic also happens to be your average employee, that paying them more will result in them spending more on your products, it was henry fords thinking as well. Is it true? I have no idea and I'm not really sure what data we would need to verify that claim. Another good chart to have, if it exists, is that charts upward mobility by year.
Since we have no conclusive data either way I will say that the one benefit to increasing the minimum wage is that there will then be fewer people supplementing their income with government resources and in theory it would lower the tax burden on everyone (more likely though the only affect would be a reduced deficit).