12.
Supra-Marginal Firms
Besides heartless politicians, misdirected compassion, and guilt-ridden no-good do-gooders and union special interests, one other identifiable group of minimum wage advocates can be cited. These are the supra-marginal businesses -- those enjoying high secure profits. It is to these businesses' self-interest to advocate higher minimum wages as protection against their weaker competitors. A secure business enjoying a high profit margin of, say, 20% will find it advantageous to support a higher minimum wage as a means of destroying its just-getting-by 4% profit margin competitors. An increase in the minimum wage may be just enough to destroy the viability of the weak firm, leaving the field entirely open for the better established successful firm.
Another way of stating this is to say that the successful firm may gain more from the elimination of these marginal competitors than it loses due to paying the higher minimum wage set by law.
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