Quote Originally Posted by pathetic sheep View Post
Ben will also spend that $8. It has been shown that low wage workers spend paychecks much faster. Often minimum wage workers consume the entire check the same week it is received. High velocity money boosts the economy. Ben is going to make car payments, pay rent, get cable, and maybe take Suzie on a date to fast food place.

You would expect some inflation. But the effect of past minimum wage increases was much lower than would be expected. The increases to minimum wage were almost entirely absorbed by lost profits. I should probably find the source for that. I have heard it multiple times. But that is for legal workers like your Ben.

For illegal workers like Jose the wage difference will be exclusively criminal profits pocketed by farmer Joe. The market price for commodities will be set by legal industry. A lot of that will be spent on land purchase. You get inflation from higher land prices. It will be harder for Ben to find work because there are fewer legal farms hiring.
Well I'm by no means an economy expert or anything, I just wanted to point out that it's not as simple as "Keep the money in America!". There are always consequences to decisions like these.

I will say though that minimum wage increased are usually not all that substantial. $.50 here, $1 there. I wouldn't expect companies to react too much from chances like that. However, the cost of labor for people employing illegals would generally be very significant (depending on just how much lower than the minimum wage they're being paid). I don't think using minimum wage increases as a model would be a very accurate representation of what the effect would be.