An Apartment Divided: Minimum Wage
The Minimum Wage
Welcome back! Before we go any further, it’s important to note our posts are not necessarily the opinions of our employers and of course, not every single Republican thinks the same as Haley and not every single Democrat thinks the same as me.
Our first topic, as you may have guessed, is the minimum wage. The federally-mandated minimum wage is $7.25 per hour. Each state and city has the authority to raise their minimum wage as they see fit. Generally, Democrats are in favor of raising the minimum wage and Republicans are not. Here’s why:
Ryan:
Many people in the Democratic Party are advocating for a federal minimum wage increase to $15 an hour, however, I am not one of them. Often times a $15 minimum wage increase is aimed at corporations such as McDonalds and Wal-Mart who can undoubtedly afford the increase. It is also aimed at cities where the cost of living is extremely high. I am not entirely opposed to $15, but I am more in a favor of a great compromise of $10.10. This is the same level that President Obama set for all federal employees and the same level that 71% of Americans currently support.
Many believe that raising the minimum wage even a dollar is going to kill the economy and kill jobs. They argue that minimum wage jobs are just a stepping stone for your future and most minimum wage jobs are for teenagers that are developing skills. These are myths.
Myth 1: Raising Minimum wage kills jobs, the economy, and businesses
More than 600 economists, including 7 Nobel Peace Prize winners, say, “Research suggests that a minimum wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, rising demand and job growth, and providing some help on the job growth.” In a recent survey, 3 out of 5 small business owners supported a gradual minimum wage increase to $12.00 an hour, 2 more dollars than my compromise. Small business owners wouldn’t support this if it was going to kill their businesses.
Myth 2: It is only teenagers working to develop their skills for future jobs
Currently 89% of people working minimum wage jobs are above the age of 20, and 260,000 minimum wage workers have a college degree. As for the future jobs argument, 2 out 3 people stay in their minimum wage job after a year of employment. These are not just teenagers working temporary low-income jobs, these are adults trying to make a living and raise a family.
Minimum wage has been around for over seventy years and currently 29 states including the District of Columbia pay higher than $7.25 an hour. Increasing the minimum isn’t a far-fetched idea. If it truly killed jobs it wouldn’t have lasted this long and states wouldn’t continually pass raises. However, Iowa still hasn’t raised their minimum wage which shows we still have a ways to go to ensure that every American who works 40 hours a week isn’t living in poverty. We must give America a raise.
Haley:
While the minimum wage may seem like a solution to reduce poverty in our nation, it is important to carefully consider all consequences, unintended and expected, of enacting federal policies. The fact of the matter is raising the minimum wage is a short-term idea for a long-term problem. Raising the minimum wage doesn’t help the people it’s intended to, reduces America’s ability to compete internationally, and pushes workers out of a rapidly-changing workforce.
Most people who argue for an increased minimum wage claim it will help working adults rise out of poverty. However, according to the Bureau of Labor Statistics, 49% of those earning minimum wage are age 24 or younger, and 62.2% are a part of families who earn two or more times the poverty level. For teenagers working minimum wage jobs, 83.2% of them are from families above the poverty line. According to the Cato Institute, “The popular belief that minimum wage workers are poor adults (25 years old or older), working full time and trying to raise a family is largely untrue. Just 4.7 percent match that description.” So in actuality, raising the minimum wage doesn’t help the people who need it most.
Everyone knows the United States doesn’t produce goods the same way we have in the past. The economy is different than it used to be, and as technology advances the need for unskilled labor decreases. Technology is certainly a wonderful thing, and I am certainly an advocate for innovation and advancement. But when it comes to the minimum wage, a raise would only help push people out of the workforce faster than natural technological advances are already pushing.
According to a 2012 study, “…on average, about one-sixth fewer jobs are created on net for each 10% increase to the minimum wage, all else equal. This effect is approximately equivalent to decreasing a state’s job growth rate from the median to the 30th percentile (or from the mean to the 35th percentile).” This is a time for America to rise up, fiercely compete on an international stage, and grow our job markets, not fall to international competition and settle for decreasing growth rates. In the long run, and in these changing times, a decreased job growth rate hurts businesses and the workforce much more than not raising the minimum wage.
Overall, while the idea of raising the minimum wage sounds like a noble solution, it is actually just a short-term solution. We must focus on providing a successful future, not just an adequate present. It is important to ensure jobs for years to come, and raising the minimum wage threatens this security for working Americans.
Behind the scenes of our post…
To be honest, Haley and I had more than a few heated debates while discussing this post. Great sign for this blog, right? But for real, this time we didn’t exactly reach a compromise. Even after reading and discussing my thoughts, Haley still believes there are better alternatives to reduce poverty that don’t hurt businesses or our economy. Even after hearing and reading Haley’s arguments, I still believe that a minimum wage increase will significantly help the problem while doing little damage for our country’s economy. We did brainstorm some other ideas to help bring down poverty in this country, ranging from tax credits to expanding education. Topics we will for sure discuss in future blogs. Overall, the aparment’s still standing.
