Joshua of Labor in 2014 (Lazinger). Currently, the
Joshua Van DrieMs. McKendryEnglish III31 Jan 2018Minimum WageShould the Minimum Wage be Raised to $15/hr?Part 1: IntroductionAccording to the Department of Labor, the very first minimum wage was created in 1938 and was set at a mere 25¢ an hour. Over the eighty years that a minimum wage has been required by law, the issue of increasing it has been discussed constantly. In order to keep up with inflation, the federal minimum wage needs to be escalated frequently enough to provide a living wage for low-income families and the United States may be in need of an increase soon.Compared to other first world nations, the United States has the lowest minimum wage relative to median income. The Washington Post reports that the annual salary of a minimum wage worker amounts to only 35% of the median income of the United States (Ingraham). In other words, minimum wage workers are making less than half the average income of the average American. Clearly, the minimum wage needs to be updated, however, the question is not if it should be raised. The question is: what it should be raised to?In the United States, many workers are adopting the “Fight for $15” slogan created by the B.C. Federation of Labor in 2014 (Lazinger). Currently, the minimum wage in the United States is $7.25 an hour, which may not be enough to support a healthy lifestyle in today’s economy (USDL). However, an increase to $15 an hour may not be the solution.On one hand, a $15 minimum wage would “put more money in workers’ pockets,” allowing for increased spending at small businesses and a boost for the economy (Murray). In theory, raising the minimum wage to $15 would help millions of low-income workers support a better lifestyle. Most families that rely on minimum wage income live below the poverty line and doubling it would help many rise above. The increased spending would also be beneficial to local businesses who could see an growth in sales and profits. However, while a $15 minimum wage could theoretically benefit some workers, it could also leave others without a job.In Seattle, a new law required businesses to pay workers at least $15 an hour by the year 2019. As of January 1, 2017, employers were forced to pay at least $13 an hour which resulted in a 9% cut back on hours (USA Today). $7.25 an hour might not be enough to support a family, but doubling the minimum wage in such a short amount of time may result in a fewer hours and higher unemployment. Instead of cutting pay for upper management or reducing unnecessary expenses, many businesses instead chose to reduce hours and let go employees. If a well developed city like Seattle has to cut hours to afford a $15 minimum, rural towns and small communities could suffer. If the minimum wage is doubled all across the United States, businesses may be forced to increase prices, lay off workers, or close their doors. For this reason, many businesses are lobbying to keep the minimum wage where it has been for the past nine years.Part 2: Contributing FactorsKeeping the minimum wage at $7.25 would force many families to continue living in poverty, but a $15 minimum would put businesses in trouble, increasing unemployment. The ideal minimum wage is somewhere in between, but businesses and employees continue to oppose each other and fail to find common ground.Primarily, minimum wage workers are asking for too much. If a $15 minimum wage is put in place, businesses need to either cut costs or increase profits in order to afford the increase in pay. To cut costs, many employers would be forced to reduce hours. In 2017, Wendy’s CEO Bob Wright expected a 4% increase in wages. In order to continue making a profit, every store was required to cut 31 hours every week which is equivalent to firing one employee per store (McBride). Increasing the minimum wage to $15 would benefit many low-income families, but it would also cause a massive rise in unemployment. If every store had to let one employee go, millions of workers would be searching for jobs that no longer exist.If employers do not want to reduce hours, they have to increase consumer costs in order to afford a $15 minimum. However, increasing consumer costs would minimize the benefits of a minimum wage hike. If products and services become more expensive, the cost of living would would increase and minimum wage workers would be right back where they started. Econ Focus puts it this way: “many low-income workers will have higher incomes as a result of the minimum wage, but goods produced by those workers are also now more expensive (Morrison).” When prices increase, minimum wage workers continue to struggle to afford basic needs and inflation damages the economy as well. Setting the minimum wage too high would cause nationwide inflation, which is bad for everybody. However keeping it too low, would force many families back into poverty. The minimum wage has to be set closer to America’s median wage in order to make both employees and employers happy.Part 3: Current Problem Solvers and SolutionsDespite consistent opposition between businesses and workers, some cities are making steady progress. The best solution for both businesses and employees is a moderate increase in wages. Moderate growth keeps employees satisfied and, in addition, businesses can keep a well-adjusted profit margin.It is important to note, however, that different living standards require different wages. Depending on location, the cost of living varies widely, which is why 29 out of 50 states have minimum wages above the federal minimum (EPI). To be accurate, not all 29 states have a high enough minimum wage compared to living costs, but many states have made significant improvements. Illinois, for example, has a minimum wage of $8.25, but in Chicago, where cost of living is higher, the minimum wage is $11 an hour (EPI). It is important for states and cities to heighten their minimum wages to be more comparable with inflation and living costs. Cities that have moderately higher minimum wages also have lower poverty levels and higher standards of living. After Chicago raised its minimum wage in 2009, other cities followed along and have seen serious improvements.In addition to having increased wages, many states have made recent improvements. In California, minimum wage increased to $10.30 for small employers and $11.00 for larger companies (Dayen). What California is doing could become a long term solution for many states for two reasons. First of all, California provided a moderate increase compared to a drastic change. Small increases are far more beneficial to the economy and do not result in unemployment. In addition to this, having two separate minimum wages makes it easier on small businesses to stay open in today’s economy. Many small businesses, especially new ones, struggle to maintain a large enough profit margin which is why many do not employ more help. If small businesses have a lesser minimum wage, they will be able to provide more jobs and increase production, which is beneficial to everybody involved.Part 4: Current & Future ConsequencesIf businesses and employees continue to disagree on what the minimum wage should be, current problems will become worse and more issues will arise in the future. Primarily, if minimum wage workers do not receive an adequate increase in pay, millions of employees will fall further below the poverty line. Ontario Pope, a St. Louis resident, recently received a pay cut after a new law restricted cities from setting a higher minimum wage than the state. Ontario, who has two kids, cannot afford a home and is forced to live in motels and with family members (Etehad). For people like Ontario, a moderate increase in pay could be the difference between supporting a family, and living on the street. As prices continue to inflate, a stagnant minimum wage is detrimental to the millions of workers who rely on a minimum wage income to support their families. A minimum wage bump is desperate need, but if the “fight for $15” campaign is successful, even graver consequences could ensue.As represented by Seattle, a drastic increase in the minimum wage could result in widespread unemployment. While some employers can cope with fewer employees, other companies will be forced to move manufacturing jobs overseas. In Los Angeles, between 2005 and 2015, “wages rose by about 17%” and caused “the average number of apparel manufacturing workers in the area to drop from 61,800 to 42,000” as companies move jobs overseas (Mendoza). Forcing companies to pay more for the same labor provokes them to find cheaper labor elsewhere. Raising the minimum wage too high will cause companies to move jobs into sweatshops and factories with no child labor regulations and poor working conditions. A $15 minimum will take jobs away from Americans and increase demand for cheap labor in foreign countries.Part 5: My Suggested Solution/ Call to ActionIf $7.25 is too low and $15 is too high, a better minimum wage is somewhere in between. The minimum wage needs to be high enough for employees to live comfortably but low enough for businesses to stay open without letting employees go. However, the cost of living fluctuates in every city which is why the federal minimum wage should not be a single number, but a range of acceptable options centered around $10.90. According to The New York Times, $10.90 is “exactly one-half of the median wage for the average hourly, nonsupervisory wage worker in America” and having a range of numbers centered around it is the best possible solution for an acceptable minimum wage (Cowan). City and State governments can decide upon the best wage for their area based upon living costs, unemployment rates, voter approval, and other factors. People in rural Kansas do not need $15 and hour to feed their families, but people in New York City do. Keeping a single minimum wage would put workers in rural areas at risk of unemployment and workers in large cities at risk of poverty. But, a range of wages puts every minimum wage worker in the right position to support their families and have a decent life.