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Blog Post #8 – The Living Wage – Tiffany Fan
March 17, 2015 | Leave a Comment
One of the most spoken about and controversial solutions to the income gap is raising minimum wage in New York City. Having first heard of raising minimum wage years ago, it seemed like a positive step initially; however, now, I am quite skeptical. Being that New York City is an expensive city so live in, it seems as if raising minimum wage would help the low-income and middle-income households, but there exist many indirect consequences.
There are a variety of outcomes that can result from higher minimum wages such as higher prices in the long run. When minimum wage reaches a certain point, production would lead to more outsourcing and then there will result in even less full-time jobs available in the United States. At the same time, it can also cause for more job opportunities due to increase productions necessary since more low-income residents are able to purchase products. In addition, it can also cause for employees that are more productive and thus, leading to a higher production rate. But what should be considered the minimum wage when we always want more than what we have? At what point should minimum wage stop increasing while still having an increase in productivity?
James Sherk’s “Who Earns the Minimum Wage? Suburban Teenagers, Not Single Parents” provides insightful information that contradicts what most individuals believe. When most individuals who earn minimum wage are those of teenagers who live in a household earning middle-income, it questions the real outcomes that may result in raising minimum wage. Of those who are earning minimum wage, approximately 23 percent fall at or below the poverty line because minimum wage workers consist mostly of teenagers. For me, it still seems hard to believe. For 62 percent of minimum wage earners to still be enrolled in school and 68 percent of minimum wage earner to be above the poverty sounds absurd to me since a big focus in New York City is assisting the working poor.
The focus should be on single parents with kids as portrayed by the graphs in Kevin Short’s “Who Will NYC’s New Living Wage Policy Benefit Most.” In this case, it favors single parents and couples without children. Minimum wage will never meet the amount of living wage necessary for an adult and two kids, but to at least surpass the level of poverty wage would be a step in the right direction. Since Sherk focuses on 60 percent of young females who earn minimum wage and 67 percent of older females earn minimum wage, I wondered how many were single parents with kids. In 2014, the U.S. Census Bureau indicates that over 80 percent of single parent families were lead by mothers. I question if there is a correlation between these statistics on single parents with kids and females earning minimum wage.
The worry should be providing more full-time jobs for those who live below the poverty line. To simply raise minimum wages is far from the answer to lessen the income gap. As mentioned by Christina D Romer‘s “The Minimum Wage, Employment and Income Distribution,” I favor the government providing supplements to wages for low-income households and pre-kindergarten education to decrease poverty and crime. In the long run, there needs to be more jobs opportunities for the low-income individuals such as factories and focusing on directly helping low-income individuals themselves.
