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Deana Chefchis

$15 Minimum Wage?

March 16, 2021

$15 Minimum Wage is Long Overdue

In today’s economic climate, a minimum wage increase to $15 is long overdue. Raising the minimum wage to $15 would bring many Americans above the poverty line and would begin to close the growing income gap present in our society. Despite arguments that raising the minimum wage would cost America jobs, studies show that giving workers more money to spend would stimulate the economy, generating more business activity and job growth. Additionally, 67% of Americans support raising the minimum wage to $15 (Pew Research Center).

The federal minimum wage  has not been raised since 2009. Since then, it has sat at a mere $7.25/hour, with wages being even lower ($2.13/hour) for tipped workers (CNN). For workers with dependents, the current minimum wage cannot even lift them and their families above the poverty level. If you are an adult who works 40 hours a week and earns the minimum wage, you make around $15,080 per year. For an individual, this is barely sufficient to stay above the federal poverty level of $12,880/year. However, if you have someone else to support, this pay is not enough to raise you above the federal poverty line for people with dependents, which is $17,420/year. Of course, we shouldn’t only be trying to help our citizens creep above  the poverty line. America, one of the richest countries in the world, should be ensuring that every single person living and working here can feed their children, pay their bills, and have extra money for a rainy day. Raising the minimum wage to $15 would be a small step towards this goal.

Raising the federal minimum wage would also help to close the income gap that disproportionately affects minorities. Currently, 1.2 million workers make below the federal minimum, and states with the largest proportion of minimum wage workers (Mississippi, Louisiana, South Carolina) are those that do not have a higher statewide minimum wage. If the minimum wage were raised, it would generate $107 billion in higher wages for workers, with 31% of African Americans and 26% of Latinos getting a raise. 59% of those who would benefit from a $15 minimum wage are women, 28% of whom have children (the Economic Policy Institute).

Though a $15 minimum wage might seem like a shock to the economy, especially for small businesses, the Raise the Wage Act would gradually implement the $15 wage by increasing the minimum wage each year until the $15 ceiling is reached. This would probably happen in 2025, by which point even $15 will  be too low when adjusted for inflation. This gradual implementation will give businesses and the economy time to adapt. According to the Economic Policy Institute, after the minimum wage was raised in 1968 (the highest it’s been historically), gaps in racial earnings closed while simultaneously avoiding a decrease in employment opportunities for underpaid workers. Therefore, there is historic precedent for raising the minimum wage.

Many individual states have already elevated their statewide minimum wage. California currently has a $14 minimum wage, and is a one-fair-wage state, along with six others. In one-fair-wage states, tipped workers have the same minimum wage as everyone else. Although it’s been implied that raising the minimum wage for tipped workers (another part of the Raise the Wage Act) would hit the restaurant industry hard, these seven states had stronger restaurant growth than states with a lower minimum wage for tipped workers (the Economic Policy Institute). Additionally, if we start to pay people more and help to elevate them above the poverty level, the government will also be able to spend less money on federal support programs like Medicaid and food stamps, as less families will have to depend on them to get by. These programs cost taxpayers more than $107 billion a year, and though they will always be necessary to help people in need, congress members shouldn’t be resisting a minimum wage hike when it’s just as big a   help to Americans as Medicaid is.

An increase in the federal minimum wage is long overdue. Our current minimum wage is barely sufficient for a single person to live on, let alone a family. Studies have shown that workers in low wage jobs and their families will benefit the most from an increase in income. In the past, minimum wage increases have improved infant health while also reducing child abuse and teen pregnancy (the Economic Politcy Institute). By raising the minimum wage to $15 we will be creating a better future for every American, and building a country that can live up to its slogan, the “land of the free,” because we are never truly free until we help free those around us. To raise the minimum wage is to release people from the chains of poverty, the wrath of inequality, and the uncertainties of a future in which the will of the people does not succeed.

 

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$15 Minimum Wage will Hurt those it is Supposed to Help

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In January, Democrats introduced the Raise the Wage Act of 2021, pushing for the gradual increase of the federally mandated minimum wage from $7.25 to $15. The minimum wage should not be raised to $15 an hour, though, because it will end up hurting those it was trying to help. While the idea seems noble and praiseworthy, the arguments for increasing the minimum wage remain based upon emotions instead of accounting for the economic consequences. This increase in hourly wage would ultimately end up hurting the people it was intended to benefit. It sounds nice: the idea that grocery store workers would get paid more, but they will ultimately be replaced by robots. Women and minorities would get an increased salary, but they will also lose healthcare benefits and proper training. Many high schoolers will get a little more spending money, but will it be used effectively in an effort to advance in the workforce?

Raising the minimum wage has a multitude of negative effects. For one, small businesses will be forced to raise their prices to make up for the growing cost of labor. This leaves customers weighing the benefits and drawbacks of spending more money for their products and they can easily elect to take their business elsewhere to larger corporations with more money at their disposal. Small businesses are already struggling in the pandemic, and forcing them to shell out more money might just leave some or all of their employees jobless. Larger corporations with more money to spend will see the increased labor costs and elect to invest in technologies that can displace workers. Amazon has launched several prototype stores called Amazon Go that emphasize no checkout and no lines. Without checkout, cashiers are out of jobs. These stores are paving the way and soon, other big chains will follow. They will follow even sooner if the minimum wage increases, for these businesses are all about making money. Corporations will do anything to achieve financial prosperity, and paying workers more money per hour does not fit into a financially prosperous plan for the future. Even if companies do not choose to go the artificial intelligence route of cashierless checkout and sensors that scan your groceries as you exit the store, studies show that to make up for the increased wage costs, employers reduce benefits and on the job training, things that are crucial to the health and effectiveness of employees.  If the minimum wage is raised to $15 an hour, there will be fewer jobs available for those that need them and the people who have jobs will be less qualified for their positions than before due to the decreased individual training.With this, a higher minimum wage also baits people into staying in one place at one job for too long. People will work minimum wage jobs throughout high school, feel too comfortable, skip college, and after a few years, find out that they are not really marketable and there is no demand for people that have only had fast food experience in the real workforce. These jobs are not meant for a lifetime. They are not designed to provide for a family. These jobs are a starting point or a safe spot to weather the storm after a layoff. Higher pay gives minimum wage workers a false sense of security and makes them think the job was intended to support a lifestyle, which it wasn’t. On the contrary, lower pay encourages people to look for a more substantial job and evaluate their potential to learn and grow, possibly moving up the ranks in a well paying job.

Raising the minimum wage will only hurt the current minimum wage workers. It will negatively affect small businesses, big companies will replace their workers with robots, workers will lose health benefits and quality training, and it is important to remember that minimum wage jobs are not meant to support a lifetime; they are a safe place to land. A minimum wage job is just a start and should not define people’s futures.

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