Mar
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Class 14 – The Living Wage – Mohd Sakib
March 17, 2015 | Leave a Comment
The issue of increasing the minimum wage has been at the forefront of economic issues both nationally and on the state level. From the political hoopla and noise that this dilemma always creates, it seems as if the debate is worthwhile and an increase would help numerous Americans across the United States. I personally have believed in this sentiment because there haven’t been many other initiatives that seem to directly affect low-income or below the poverty line-families as increasing minimum wage. After reading the four articles for Class 14 however, I have realized how ineffective these actions may be in helping to relieve the economic problems that afflict poor. As explained in the article by the Huffington Post, Mayor Bill de Blasio’s new executive order will only allow some low-income families to earn close to a living wage but still falls short of expectations. “The raise will boost childless single people and couples above a living wage” but even that effect is very minimal and almost unattainable. I believe this shows that piece-meal legislation is definitely not a long-term solution for an unsustainable wage made by numerous families.
Another interesting trend that is brought up from these articles is the ripple effect that a mandate on increasing the minimum wage has on other cities. The increase from $8 an hour to $11.50-$13.13 for some 18,000 New York workers has surprisingly led to other states and cities to create their own increases in minimum wage. The catalyst for these changes initially was strikes in NY few years ago where hundreds of fast food workers demanded $15 an hour. I remember hearing about the strikes but I actually didn’t think much of it because $15 an hour for a minimum wage seemed very lofty and unrealistic. Fast forward years later, and Seattle initiated that same law for its workers, which I found to be shocking. Contemplating the change however, it does make sense as a substantial raise does provide incentives to workers to perform better in order to keep their modestly paying jobs, and for businesses to attract the best talent. Even on business level, we see companies following suit in wage raises as Walmart recently increased their hourly wage to $9. This has spurred other large retail chains to increase their hourly wage as well.
Contemplating this issue on a higher level, I have always acknowledged the minimum wage floor as a consistent law that has always been in place to ensure that companies provide a fair hourly wage to its employees. “The Business of the Minimum Wage” however, has really opened my eyes to the alternatives that the government may take to help the plight of the poor. I really enjoyed reading about the pros and cons of the minimum wage as presented by this article as it elucidates who actually benefits from this initiative, even if it may actually work. One example that I found interesting as to how the redistribution may be faulty is how even if businesses increase their minimum wage, the adverse effect would be increasing their products’ or services’ costs in order to avoid losing profit from those operating expenses. This increase in price would trickle down to the employees and force them to spend more of their income on food, which still hurts the poor. Although I still am undecided on whether there should be a minimum wage floor at all, I do agree with this article’s arguments that there should be welfare laws in place to provide more generous earned-income tax credits. Other programs should be sought out to provide directed help for the poor than just raising wages.
What I found the most surprising from these articles was the fact that suburban teenagers who were moderately well off and not living under the poverty line were the ones who were primarily earning the minimum wage, not single parents. My thoughts about who actually earns the minimum wage was again construed as I thought of the many political speeches and advertisements that showed two, middle-aged working parents that are struggling to put food on the table. Although I am sure this scenario is true, I did not realize the large percentage of younger workers that fall into minimum-wage positions. I do believe that it is ‘okay’ if these younger workers who fall between the ages of 16 and 24 do make less as most of them aren’t usually providing for their family as stated in the article. To further support this point, the article states that the “average family income is $65,900 per year” for these younger workers, illustrating that they truly are better off than middle-age workers who are the primary breadwinners for their families. Even older workers do not necessarily fit the stereotype as most of them do live above the poverty line.
These startling statistics beg the question that are governments, both local and national actually focusing on the proper initiatives or even demographics? I definitely don’t think so, and I also believe the general public should be educated more on these issues, as well as what will actually benefit them and the poor. Instead of going on strike to immediately try to raise the minimum wage, and having a very short-term mindset, I think workers need to contemplate the most effective initiatives that would help large populations rather than the few. I feel as if psychologically, seeing your hourly wage increase from $9 to $15 is definitely fulfilling and satisfying. However, rather than having that temporary positive effect, and then have to use that additional income to buy more expensive food or clothing, I think a more tactful approach would be to increase tax credits or start from the bottom-up and improve education for the poor. These plans are all interdependent, but it is important to see which one has the biggest consequence.
