The Fight Over Minimum Wage

dollar dollar billBy Chris Rivera


On June 25, 1938 President Roosevelt signed minimum wage into law, this now allowed hourly workers to receive 25 cents per hour. In today’s money that would be the equivalent to $4.18 an hour. The minimum wage was enacted into law to make sure the lowest paid people would receive an adequate level of pay to live on. And it only affected about 20% of the labor force.

Since 1938 the minimum wage has been raised 22 times, with the last time taking place in 2009. But it peaked in 1968, with it reaching, 10.95 an hour in today’s dollars.

There are two sides to the debate revolving around raising the minimum wage. There are those who are for it and see it as an opportunity for minimum wage workers to earn a living wage. Then there are those against raising it, stating it is harmful to the economy. Within this article I will discuss both arguments and let the reader make their own decision.

Let’s first start with those that argue not to raise the minimum wage. They argue that raising the minimum wage to $10.10 would cost America 500,000 jobs, according to the CBO. It will not just cost America jobs, but it will force companies to hike up their prices to compensate for higher wages that they are paying their employees. And it will cause companies not to hire new employees because more experienced workers would block younger workers and less experienced workers into entry level positions. It would also cause companies not to take a risk on people with lack of experience and opt for other solutions like technology to do the work.

In an article with the Wall Street Journal, the CEO of McDonald’s, Mr. Thompson, plans to introduce new technology, “to make it easier for customers to order and pay for food digitally.”

But it is not jut McDonald’s that is considering introducing technology in the midst of the debate. NPR reports on Joe Olivo, who runs a small printing press in New Jersey, says higher minimum wage would force him to make cuts.

Olivo mentions how he either has to raise revenues, or find ways to cut expenses. These cuts in expenses would include cutting employees, not hiring new employees, or bringing new technology to cut the number of employees he needs.

Another argument against raising the minimum wage is how it would not benefit the GDP. It is estimated that if the minimum wage is increased it would only equate 1.25% of the GDP, and therefore insignificant.

On the other side, there are those that argue for raising the minimum wage. They argue that raising the minimum wage to $10.10 an hour would reduce 4.6 million people from living in poverty. They also argue that 16.5 million low wage workers could see an increase in their weekly earnings. And that the majority of the people who work for minimum wage are not the stereotypical teenagers who are just trying to get an entry level job; the average minimum wage worker is 35, and 88% percent are at least 20 years old. Also half are older than 30, and about a third are at least 40.

Supports for increasing the minimum wage like to mention how it would save tax payers money, because low wage workers are no longer seeking government assistance to help support them. It is estimated that it would save tax payers billions of dollars if the minimum wage is increased.

Supporters of raising the minimum wage claim that it would not cause a loss of jobs and that 85% of small businesses already pay more than minimum wage.



Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.