According to the Bureau of Labor Statistics, almost half of all workers making minimum wage or less are less than 25 years old. At these ages, a large salary is not needed so why raise the minimum wage all the way to $15? Robert Reich of “Minimum Wage Should Be Increased to $15” argues that raising the wage will overall benefit America when in reality it hurts more than it helps. While it will put more money in low wage workers, it will take money away from employers while not having any known definite benefits.
Having a higher minimum wage is not needed for those earning it, it has a little effect on poverty, and makes it harder for companies to hire.
When it comes to those who work minimum wage, they either do not have to worry about financial problems, or are not major breadwinners. The reason most minimum wage jobs require such little experience is so younger people and those less capable can make some sort of money.
Reich explains how workers are becoming more productive today, but this would apply for the majority of the workforce who are the major breadwinners. For low wage workers, “they are secondary earners – an elderly parent earning some retirement income or a spouse with a part-time job. Or they are young people living with their parents”(Hassett and Strain 1). When discussing teens and young adults, these types of jobs are a way to make some extra side cash for themselves so they do not have to rely on others.
As Michael D. Tanner, head of domestic policies in Cato Institute, states, “a minimum wage job is a starting point, not a destination”(1). As one gets older and gains more experience, they have the opportunity to get promoted or a new better paying job. Low paying jobs aren’t made to be long term so they don’t need to have high salaries. Matt Wilson, former deputy assistant secretary of the U.S. Department of Labor, states that even if a younger person does not work, many low wage workers live in families that are above the poverty line (3). Those not working can already be sustained due their family income. A high wage is unnecessary since the workers do not require a large income and already have some source of income. Those in poverty on the other hand do not even work in the first place.
The go-to claim for raising the minimum wage involves helping those in poverty by putting more money in their pockets, but this cannot happen if the majority of those in poverty do not work in the first place. “Many poor Americans (63.5%) do not work, and thus aren’t earning wages”(Wilson 9). Poverty starts from not being able to find an earning. If the wage was pushed up to $15 per hour, it will only affect the few who still have their jobs and little to none of those who do not. Furthermore, any gains that come from poor households would be minimal. If the wage were to increase to even $9.50, “only 11.3% percent of the workers who would gain live in poor households”(Wilson 9). Because of the little impact raising the minimum wage would have on poor people, it should not be a concrete solution to solving poverty. Instead of making it easier to earn money and find a job, it will actually make it harder as companies would have to adapt to the change of payment.
A higher wage will require employers to spend more money on their employees. While this will make it harder to find a job, it will also affect those already in the workforce too. Reich explains how the boost in money will allow for those earning it to spend more which will help spark the economy, but there will be less people able to actually spend that money since most will have trouble finding a job. According to a study done by Michael Hicks, Professor of Economics at Ball State University, he ”concluded that a 10 percent increase in the minimum wage results in a roughly 0.19 percent increase in unemployment, meaning the loss of about 160,00 jobs”(Tanner 1). That means even an increase of about 73 cents to the minimum wage would account for the loss of 160,00 jobs. With a lack of jobs, there will be a lack of workers, meaning a lack of people spending that money. One reason for this would be in part of getting rid of jobs that are not necessarily needed, or that can be done with some sort of robot. In addition, companies will have to spend more money on employees which would make them less encouraged to hire more workers. Kristen Lopez Eastlick, senior economic analyst at the Employment Policies Institute states the increase of 25 cents per hour in 2009 resulted in “$10,000 in annual costs for a business with 20 minimum wage employees” (1). This ties back to most minimum wage workers being lower skilled or less capable people. An increase of wage would make it so employers would be more selective on their employees and search out those who are more skilled while getting rid of those who are not, like the younger workers. Instead of helping the poor and boosting the economy, a high minimum wage would actually make it harder to get a low wage job while not even fully benefiting the poor.
If there was going to be any change in minimum wage, it should be done carefully and not so drastically. Raising the minimum wage from $7.25 to $15 is a large jump with no reasoning to back up it is increase. The consequences and downfalls are evident in raising the minimum wage, but a slow steady increase will allow for the economy to adapt while being able to keep track of it. Another solution would be requiring employers to give their workers fixed raises or promotions to accommodate for their productivity. As one´s pay increases, they can spend more, allowing the economy to move. This will give boost in money in America which could be spent on job funding or even directly helping the poor. Solving poverty is not a quick, one solution task, but requires time and careful thought.
A high minimum wage increase will ultimately lead to little effect on poverty and harm the workers. Arguments that are for the increase use the raise the minimum wage option as an easy solution that sounds good for everyone. What it does not account for is the increase of money spent by employers, which would cause a limit in hiring. Those already working the wage are already sustained, a high wage will not affect poverty, and it would result in a decrease of jobs. If it were as easy as just giving more money, poverty will not still be an issue today.
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