In the Silicon Valley, we enjoy some of the highest minimum wage rates in the world. Even compared to other places in the United Sates, the $15 minimum wage in Mountain View is more than twice that of Texas' $7.50. However, minimum wage is not always a strict indicator of prosperity. The high minimum wage in the Bay Area corresponds to our relatively extreme cost of living.
In economics, we say that there is no such thing as a free lunch. When examining minimum wage, it is important to realize that increasing minimum wage increases the cost of labor for an employer. This may limit the amount of hours that an employer can afford to keep an employee on the job, in some cases increasing minimum wage can decrease the total salary of an employee. Employers may also choose to lay off employees if a minimum wage increases causes their marginal revenue cost to be greater than marginal revenue product. Another solution that employers have found is to replace service industry jobs with automated systems, something we see especially in the tech center that is the Silicon Valley.
To conclude, minimum wage increases do not always correspond to great social benefits. More often than not, minimum wage increases place pressure on employers to reduce their costs and ultimately harm workers.
https://wheniwork.com/blog/the-pros-and-cons-of-raising-the-minimum-wage/
https://spectator.org/the-downside-of-raising-the-minimum-wage/
https://www.investopedia.com/articles/markets-economy/090516/what-are-pros-and-cons-raising-minimum-wage.asp
https://medium.com/american-restaurant-supply/automation-in-the-food-service-industry-where-are-we-now-and-what-does-it-mean-8a748e66ef3b
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I really enjoyed your article and the points presented! Raising minimum wage can be detrimental to a company, as they have to make up for this increase and that directly affects the consumer. Additionally, raising minimum wage can small companies that have not become large scale. I think that many people think it is good to increase minimum wage, without thinking about both sides. In conclusion, I think you presented a knowledgeable view on minimum wage.
ReplyDeleteYes, I agree that raising the minimum wage will not make the public happy. Companies will employ less people, which results in extra negativity that cancels out with the employed. In fact, some people are talking about completely removing the minimum wage. Even though I think that it is not a good idea, it will not be a complete disaster many seem to think.
ReplyDeletehttps://www.forbes.com/sites/williamdunkelberg/2012/12/31/why-raising-the-minimum-wage-kills-jobs/#468dd9681b6e
I like how you introduced new topics we are learning about to explain why minimum wage. Many people believe that raising minimum wage would simply increase the amount of income for those at the bottom and would only help, and you explained why that isn't true. However, I do believe it is important to consider both sides of the agrument, as there are many reasons why raising minimum wage could help low income workers.
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