Bare Minimum | Kyle Kim
The current debate between policymakers, economists, and businesses about raising the minimum wage has been a complex and messy one. The lines of the current two party system have become blurred, with eight Senate Democrats voting against the inclusion of the wage increase in the most recent stimulus bill. Unlikely alliances have also been drawn, with Senator Bernie Sanders and Amazon joining sides in favor of an increased minimum wage. A movement has even been started under the name “Fight for $15”, with protestors voicing their support for a $15 minimum wage. Nonetheless, the variety of different perspectives on the issue have remained relatively concrete since its introduction.
First, let’s set some context for the situation under which this debate is taking place. The federal government first set a minimum wage under president Franklin Delano Roosevelt in 1938. The minimum wage has been raised 22 times since its introduction under 12 different presidential administrations. As of now, the current federal minimum wage is $7.25, which translates to around $15,080 a year with a 40 hour work week. Currently, 29 different states have higher minimum wages than the federal minimum, with Washington being the state with the highest minimum wage of $13.50 an hour. (Although technically not a state, Washington D.C’s minimum wage is the highest in the United States at $15 an hour). Finally, different corporations have been setting their own minimum wages, with the aforementioned Amazon, as well as Target and Best Buy all setting their minimum wages to $15. Even Costco recently increased their minimum wage to $16 an hour.
Proponents of the $15 minimum wage argue that the current minimum wage is simply not enough. After all, the minimum wage was last increased in 2009, but most things around us have adjusted their prices for inflation, including housing and goods. Thus, minimum wage workers often do not make enough money to support themselves financially, and end up relying upon government social safety nets such as food stamps. In fact, according to the Economic Policy Institute, an increase in the minimum wage would benefit 39.7 million workers, including 38.6 million adults ages 18 or older. Supporters of an increased minimum wage also argue that increasing federal wages would create intangible benefits. A $15 minimum wage could, for instance, improve job productivity and overall morale, as workers are getting better compensated for their work. This could also lead to tangible benefits, such as reduced hiring and training costs, as workers may be more incentivized to stay at their jobs for longer periods.
On the other hand, opponents of an increase argue that an increased minimum wage would be ineffectual, and even harmful, for the economy. Because the United States operates under fiat currency (a currency system in which money is assigned value by the government and our society), an increased minimum wage could simply inflate the entire economy with it. This could mean a general increase in cost of living, thereby negating the effects of raising the minimum wage. Concerns are also raised about the pricing of goods at corporations that pay minimum wage to workers, as increasing the cost of labor could subsequently create a jump in the price of goods. Job losses are another argument proposed against minimum wage, as businesses may be forced to lay off more people, or replace human workers with robots, to maintain profits under an increased cost of labor.
Of course, the differing opinions don’t stop there. Some individuals believe that the minimum wage should be left to states, with each individual state having their own minimum wage adjusted according to the local cost of living. The radical difference between housing costs in California and Texas is a frequently introduced argument for this point of view. Others believe that $15 is not enough, and that the minimum wage should match productivity, as it did until 1968. Supporters of this point of view argue that the minimum wage should actually be closer to around $24, which is in line with the productivity of workers.
In any case, the dispute over the minimum wage is one that seems to be in a deadlock within Congress. Like many other current issues, the arguments of the different perspectives have been clearly identified, with either side refusing to back down from their beliefs. However, this issue in particular has captivated the attention of people due to its significant and far-reaching effects. Amidst all of the differing points of view, one thing is clear: with millions of livelihoods up in the air, it is imperative that the decision be made with the general public’s best interest in mind.