Mar
19
Blog Post #9: The Living Wage II
March 19, 2015 | Leave a Comment
After reading yesterday’s articles, I was persuaded against increasing the minimum wage. From all the statistics, it seemed to have no effect on the poor. Today’s articles also tackled issues on both sides of the spectrum. It was interesting to read about the impact of minimum wage on the restaurant industry since there are so many people working in this business. Minimum wage jobs in fast food industries or franchises are held by young adults, but local and chain restaurants usually hire staffs that are much older. Raising the minimum wage may a bandage trying to cover these problems, but it’s not a solution.
Hawkin’s article brings up the idea that increasing wages may take a hit on franchisees that are under contracts. Franchise contracts are said to be hard or unable to be revised since they are contracted as long as 10-20 years. It is also hard for small business owners to pay the high wage of $15 since they don’t have the sufficient funds. The only way to compensate for the high wages is to increase the cost of goods. I think this is how the “living wage” can lead to inflation. Rising wages to $15 may only benefit a few in the expense of others.
Kasperkevic’s article shines light on workers who live off $2.13 and tips. This population of workers did not cross my mind until now. Restaurants don’t want to pay for labor costs and therefore make the customers pay for it. I’ve know people who had to live off tips and it really depends on the day and the customers that come in. There are customers who pay less than the recommended 15-20% tips and some didn’t even tip at all. It’s difficult to pay your rent/bills if you never know what your wage will be for that week. Now can see why most of these workers are in the low-income and poverty bracket.
The myth article pretty much states what we already discussed in last class. I agree that Government transfer programs are not very effective. However, it’s not that people don’t want to work or want to work less. The problem is that there isn’t enough jobs in supply for everyone. In addition, myth #4 is related to last class’s article stating how raising the minimum wage isn’t effective since most workers are young people who aren’t poor. I can agree with this since it’s backed by statistics and sources.
My question is: without raising minimum wage, how can we help those who earn wages based on tips? Raising the minimum wage is what majority of the population think will help lessen income inequality and help the poor. However, they should look at this from both perspectives to see where the benefits outweigh the costs.
-JanYing He
