Many of us have reaped the benefits of minimum wage.
In high school and in college, it is typical for students to work jobs in the food service business or retail sales. The $7.25 per hour helps bring extra money into students’ pockets for spending. Whether it be for food, rent or tuition bills, the minimum wage is really helpful for paying bills.
President Barack Obama believes the minimum wage should be raised to bring more people who are struggling into the middle class of America. His proposal explained during his State of the Union Address Tuesday night, would raise the minimum wage to $9, and then adjust to inflation.
Minimum wage increases at the federal level only take effect if the federal minimum is above that passed in states. As of right now, only Washington fits into that category, with a minimum wage of $9.19. According to the Washington Post, that’s a 25 percent initial boost, and a boost of 1 percent to 2 percent every year going forward.
And while it would be beneficial to those of us who work minimum wage jobs and need to support families, its potential consequences could include job cuts. According to a recent study from the London School of Economics and the central bank of Turkey, higher minimum wages increased unemployment. Other experts have also predicted similar side effects.
The potential job losses risk complicating the well-intentioned goal behind raising minimum wage.
Large business owners might be able to afford to pay their employees more money, but a lot of small buisness owners would not.
When it comes down to it, layoffs would be likely. And if making up the lost money doesn’t come in the form of layoffs, it could come from business owners raising prices for goods or forcing owners to close their establishments.
Obama is correct to be looking for ways to preserve the middle class and bring more money to blue-collar workers, but this is just not the right way to go about it.
Instead it might be a better idea to increase the minimum wage more gradually than what is proposed.