Economist said:
You seem to have got a few things mixed up. Yes, minimum wages tend to raise the wages of those at, or slightly above the minimum wage, but at the expense of the lower paid/skilled (by making them less employable).
Furthermore, your last paragraph is flawed. It is true that manufacturing jobs are more likely to be outsourced given minimum wages. But your assumption that this industry is "unique" precisely because you can outsource to cheaper labor, misses the fact that substitutes for things are everywhere. For example, movie theatres used to have ushers to walk people to their seats. If the minimum wage was increased, they wouldn't be "stuck" because they can't outsource. This is because there are other substitutes, such as scratching the job altogether and letting people find their own seat. Likewise, if you own a gas station and hire someone to pump the gas, a raise in the minimum wage may lead you to decide that you will let people pump their own gas. Or imagine that you are a business owner and you have a team of 10 janitors, and the minimum wage increases. Well, now it maybe best to just keep 1 or 2 janitors and invest in expensive equipment/machinery/technology which allows them to do the job that used to require 10 janitors. Essentially, you are missing one of the fundamental principles of Econ 101, which is that (virtually) everything has substitutes!
I didn't say raising the minimum wage eliminated service jobs because service jobs are hard to evaluate. I'm sure raising the minimum wage eliminates some, especially at the smaller family businesses, but it's definitely not directly proportional. A 10% rise in minimum wage doesn't eliminate 10% of the minimum wage jobs because employers didn't carry 10% more employees than they needed just because they could afford it - they probably tried to carry the minimum number of employees they could get away with even before the wages rose.
Besides, did raising minimum wage really eliminate the guy that pumps the gas or was it the number of Jiffy Lubes that sprang up? Gas stations quit pumping gas about the same time they started losing oil changes and lube jobs. In other words, if there ever was a market for someone who only pumped gas, it was prior to the 1930's. They still didn't cut their number of employees. Now they have people that stay inside the building and sell twinkies and chips and those employees really are minimum wage employees vs the kid that might be working at minimum wage while he's still learning to change the oil, fan belt, etc.
And does a waitress at the Brown Derby really provide better service than a waitress at a Denny's? Why tip 15% at both restaraunts when the waitress at the more expensive restaraunt isn't doing any more work than the waitress at the cheap restaraunt? If a $3.00 on a $20 meal for two is good enough for a waitress at Denny's then a $3.00 tip on a $75 meal should be good enough for a waitress at Brown Derby! They're providing the exact same service even if the food is different. Talk about subjectivity in the value of service!
In fact, come to think of it, why take a date to a Brown Derby when you could just take her through the MacDonald's drive-through and never have to get out of the car? In fact, why take your date out at all when you can watch a video at home - especially considering the real theaters have been cut up into little boxes and there's no ushers anymore! In fact, why not just watch a DVD, call Domino's, and you and your date would never even have to get out of bed? Heck, I'd tip extra - up to a whole $3.30 - for delivery in bed, even more if they stopped by Blockbusters and picked up a movie for me!
It's just tough to evaluate the value of a service job that's as much about attracting customers as it is delivering some actual service. I pump your gas so I can check your oil and point out how dirty it is. You need an oil change and you ought to use a better oil filter, which is why your oil is so dirty after only 2,000 miles - you ought to be changing your oil every 3,000 miles anyway, you know, cause your owner's manual only said every 6,000 miles because they want the car to last past the warranty, but not so long that you die before you buy another car from them. And, man, these wiper blades are shot! Can you even see out your windows when it rains!? It was worth it to start pumping your own gas if only to escape being bombarded by the sales pitch every time you bought gas.