Mar
16
The Minimum (and Unlivable) Wage
March 16, 2015 | Leave a Comment
The minimum wage, to me at least, makes little to no sense today. This SHOULD be the least amount of money that someone can live on to survive and live. Maybe this was the case when it was created by Roosevelt during the Depression, but definitely not today. The price of goods has risen dramatically in the past half-century, and the minimum wage is supposed to rise with it, as with the rise of inflation. The relationship is shameful – there’s no comparison to the ratio that each have risen.
The Heritage Foundation writes how very little people live on minimum wage, and those who do earn it are usually teenagers living with their family. That doesn’t make much sense. Why is this talked about so much if it isn’t an issue? The teenagers who do earn this (about 60%) are in college. Wouldn’t it make sense that this group earns MORE than minimum wage when the total amount of college debt outnumbers the total amount of credit card in the US? Since college is basically a must today, there’s a lot of debt to go round. Even if only teenagers are supposedly making minimum wage, this will decrease the income inequality gap that is apparent in our country.
There is always the argument made that says that raising the minimum wage will decrease demand for workers. Theoretically, this proves true. If demand stays constant and the wage is increased, the supply will shift upward, making the new equilibrium a lower quantity of workers. But this does not take into account that workers who are paid more work harder, especially if there is higher competition. The small businesses wouldn’t be able to hire many workers in the short run, but as they become more productive, they will be able to in the long run. Better and more qualified workers will be more willing to take higher paid jobs and lead to higher efficiency within the company. More money for the lower class will increase disposable income, which will increase consumer spending and help the overall economy too.
According to the Heritage Foundation, 34% of those that live under the poverty line work either full time or part time, while the rest do not work. To me, this is screaming that there needs to be reform with welfare and other governmental programs. If people choose not to work (not counting disabilities or other causes preventing work), there should be some consequences. Tax money should be used to feed those that don’t work (SNAP) and provide other necessities, like toiletries and housing.
The Huffington Post article paints a different picture than the Heritage Foundation, saying that many in NYC live below the poverty line, especially if there is a single parent with multiple children. The minimum wage is very ineffective in large cities like NYC, as rent and food are much higher priced here than in other cities.
Obama has been blocked by Republicans in Congress to raise the minimum wage, so the federal law is not moving at the moment. Luckily, at least 13 states are taking upon themselves to raise the minimum wage, with Seattle, Washington raising it to a record $15 an hour. I bet that those workers are both very happy and working very hard today.
We all know that income inequality is a huge problem and is growing. If we could probably slow its growth with increasing the minimum wage, why not do it? Those that are living in barely livable conditions would be happier and live better with only a few dollars increase. The middle and upper classes can spare a few measly dollars to those on minimum wage. I think a few bucks is definitely worth someone’s happiness. And if that explanation doesn’t work, you could say that productivity will be increased and the US economy would get better. Win-win.
