The minimum wage has been a discussion topic since the bar was first set in 1938. Since that point, we have seen an increase in the minimum wage as the cost of living has drastically increased. Yet, the increase in wages has also led to the further increase in the cost of living. In what appears to be an endless cycle of constantly increasing prices, is raising the minimum wage really the most effective way to decrease the poverty gap.
For many cities around the Bay Area, starting January 1st, 2019, the minimum wage will be increasing from $13.50 to $15.00. On the surface level, that seems like a great idea. As the cost of food, services, and housing has continued to climb for the past few decades, it is important that individuals are able to afford basic amenities. Yet, in order for businesses to pay their employees at this new rate, where does the money come from?
The answer is simple: increased prices. The only way businesses can afford to pay all of their workers at the new minimum wage, they have to increase the price of the products they are selling or risk losing large amounts of money. Currently, I work at True Food Kitchen in Palo Alto, where the minimum wage is $13.50. However, just last week, along with the shift in seasonal menu items, the price of all drinks and foods increased by some amount. The managers made it very clear that the increase in food prices was to compensate for the increase in minimum wage in two months.
Let me just summarize exactly what is happening. In order for us to be able to live in this expensive location, we have to get paid more for the same amount of work time, which only increases the prices of the things we need to buy so businesses don't lose money. The endless cause and effect of increasing wages and costs only push aside the problem, and even make it worse, rather than trying to solve it. So it really is time to think, is increasing the minimum wage really the best way to reduce poverty and make society more affordable?
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This is a very interesting post, Austin-- it's cool to blog about something that affects us directly as students looking for part time jobs, which are usually paid at around minimum wage. I think another important idea to think about when considering minimum wage is that when minimum wage increases, there is a possibility that companies will no longer want to hire workers at the new set wage. This example is seen more specifically if a wage is set for a specific demographic, say, teenagers. If teenage minimum wage was below adult minimum wage, then companies would be more interested in hiring teenagers. However, if the teenage minimum wage was then increased to that of adults, companies would likely prefer adults as they may be more experienced.
ReplyDeleteThis is a very relatable and interesting post, especially with the minimum wage increase that will take place next year. However, as someone who would benefit more from a minimum wage increase, I feel you should look at both sides of the argument. For example, raising minimum wage will stimulate economic growth as we are giving money to minimum wage workers who are much more likely to spend it and put it back into the company, rather than leaving it to the companies at the top of the chain. Another benefit is that it would allow minimum wage workers to be able to afford housing. According to a 2015 report from the National Low Income Housing Coalition, there is no state in which working 40 hour weeks at minimum wage would be enough to afford a one or two bedroom apartment for their family. Overall, while a minimum wage hike has it benifits, it is important to consider both sides before making any judgments.
ReplyDeleteThis is a very relatable and interesting post, especially with the minimum wage increase that will take place next year. However, as someone who would benefit more from a minimum wage increase, I feel you should look at both sides of the argument. For example, raising minimum wage will stimulate economic growth as we are giving money to minimum wage workers who are much more likely to spend it and put it back into the company, rather than leaving it to the companies at the top of the chain. Another benefit is that it would allow minimum wage workers to be able to afford housing. According to a 2015 report from the National Low Income Housing Coalition, there is no state in which working 40 hour weeks at minimum wage would be enough to afford a one or two bedroom apartment for their family. Overall, while a minimum wage hike has it benifits, it is important to consider both sides before making any judgments.
ReplyDeleteThis is an interesting post and I like how it brings up a personal example. I do agree with you that minimum wage may cause more problems than expected. As prices for goods go up, people are less likely to buy certain goods which will affect companies creating the products. They would start losing money as less people were buying their products. This also means that there will still be people who can't afford these newly priced products which doesn't help the poverty gap.
ReplyDeleteI found this post very interesting because this year, hourly pay increased from $14 to $16 due to the the minimum wage jumping from $13 to $15 in Sunnyvale. Since I work at a gymnastics gym, I did not visibly see a price change in class prices but I'm sure they had to to compensate for the increase pay for 100+ workers at the gym. I agree that increasing minimum wage may make it harder to get out of poverty, but I also believe that the higher pay encourages more teenagers to work, creating a larger workforce.
ReplyDeleteThis post brings up very important topics that are relatable to all teenagers who work. Of course in any situation, a teenager in High School will always accept an increase in payment. So obviously, when I see that minimum wage is increasing, I'd be excited. But your post brings up very true realities. Another thing that High Schoolers deal with is being cheap. You never want to spend a lot of money as we don't have much of it, so we spend our money in the right places. Even though we are technically receiving more money, it still won't help us that much when buying goods. If prices keep on rising because our wage keeps on increasing, then at what point is the Bay Area going to become unlivable.
ReplyDeleteYou bring up a great point here about how increased minimum wage only increases prices. In the long term, it seems that a action such as this might cause inflation, as each unit of money has less value held with it. However, I have personally noticed younger teens who are unemployed show more interest in working due to the higher wages. Due to the fact that many restaurants or other retail locations that pay minimum wage are chains, I don't think they will have too much of an issue paying their employees that much more. It really comes down to whether or not the benefits of a larger, wealthier work force will out out weigh the costs of the higher wages it requires.
ReplyDeleteAs a teen, I can relate to this a lot because the first job I get could be paid the minimum wage. When I first thought about it, I was all for increasing the minimum wage because people would have more money. However, now I agree with your point that it will not do much because prices everywhere will also go up. This would cancel out the increased minimum wage.
ReplyDeleteIncreasing minimum wage isn't entirely pointless, as it makes workers stay with an employer longer, as opposed to seeking out better-paying work with other companies. This reduces business' turnover, hiring, and training costs. Increasing minimum wage also brings people back into the workforce, as people who haven't been working may begin to consider working for the new, higher wage rate.
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