Should there be an increase in the minimum wage?

Wage increase will only drive up costs

By Teresa Combs
The Northern Light

It seems today that the most logical way to pull an unskilled, working-class citizen out of an impending poverty designation is to simply give them more money. Why not raise the minimum wage a buck or two? It will ensure that the average Joe will make more money for the same job he’s been doing, and he won’t be so poor anymore. Makes sense, right?

Not exactly. As the country has just approved the increase in the federal minimum wage, and Alaska considers raising it even more, such an action has obvious repercussions.

For example, just because you’re getting more money doesn’t mean everything will cost the same. Employers will have to combat their loss in increased wages by raising the price of goods and services.

If wages increase too much, it’s likely that businesses will have to downsize. Why keep eight employees around when you could have six and just give them more work to do?

Of course, the work will probably have to be done in the same amount of time, so this will force an employee to work even harder for that extra cash. This in turn will make it more difficult for an already unfortunate jobseeker to get a job.

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A minimum wage forces employees to work for the bare minimum. If everyone’s getting the same amount, a company won’t bother giving more money because they know everyone else in their field is paying about the same. It also doesn’t give employees much incentive to try their best when they don’t have to.

If competitiveness and fair wages for the actual work performed could be left to the market, it could create an exciting economy – people will want to work. It could lower prices and make living more affordable for everyone.

We wouldn’t have this steadily growing inflation, and we could better stabilize our economy.

As college students, we get jobs that fit our awkward schedules and require no real formal training or knowledge. And what we make keeps us on the brink of crisis – do we need medicine or food? Can we afford a new textbook, or should we wait four to 10 working days for a used one online? The check engine light is on; surely it can wait.

But even at $7.50 an hour, you can only buy so much. When prices go up to correspond to wages, those decisions aren’t going to become any easier.

Don’t be fooled by an increase, because the cost of your future meals and new clothes will reflect any change in wages. You’re going to find yourself just as poor with those deceptive numbers on your pay stub.

Wage laws keep the poor on their feet

By Aaron Burkhart
The Northern Light

A minimum wage is needed to ensure that people willing to work, often in already degrading and thankless jobs, make enough money to live on. By some estimates, as many as 6.6 million people earn less than the $7.25 proposed minimum. Of course, some businesses might be adversely affected, but if profit margin dictated policy, we’d all be working in sweatshops. Businesses that rely on minimum wage workers should look at their business model if that’s the only way they can stay open.

Without a minimum wage, this country would become even more economically divided – the poor would get poorer and the rich would get richer. Since morality and business decisions don’t mix, a federally mandated minimum wage is the only thing keeping many businesses in check. Large national corporations are usually the ones that object to paying workers more, even though they’re the ones that can most afford it. They don’t care about staying in business, they care about making ever-increasing profits – why worry about the common worker’s pay when their CEO needs a $50 million raise?

Ethics aside, saying a minimum wage hurts the economy overall is not based in fact. Empirical studies by the Economic Policy Institute after the last round of minimum wage increases a decade ago showed no negative impact on job opportunities. By increasing the income of the lowest paid workers, it puts more consumers into the economy, meaning business can now afford to pay workers more – it’s an upward spiral of economic growth that gives people a reason to get off welfare and start contributing back to the community. Small businesses that already pay more than the minimum wage won’t be affected, other than seeing millions of customers have greater buying power. Even if prices do rise slightly on some goods or services, workers who get a 70-cents-an-hour raise each year won’t mind paying an extra nickel here and there – they still come out ahead.

And those who already earn more and now find minimum wage creeping up on them have a reason to ask their own bosses for a raise. Again, it’s the upward spiral that leads to more economic development.

After adjusting for inflation, the current value of the minimum wage is at its lowest level since 1955. Without an increase, the wage gap will continue to grow, and the result will be as bad as not having a minimum wage at all – which, again, would be disastrous for the country. The only ones who want that are those already in that top 5 percent who make as much money as the rest of the country combined. A minimum wage that people can live on is all that keeps that gap from getting larger.