The fight to increase the minimum wage

 Pic courtesy of sociallyurban.com

Pic courtesy of sociallyurban.com

At the moment, if you follow even a little bit of politics in the country, there is a lot of buzz about minimum wage. The government is fighting to increase the minimum wage to at least $10.10/hr. There is a lot of debating all over the web with some people supporting the raise and others fighting against it. During the State of the Union speech, the POTUS asked Congress to vote on the raise and also asked businesses to consider raising the minimum pay. Some of the polls done after the SOTU speech showed most Americans were in support of the raise. I am sure even the PF bloggers have differing opinions on whether the raise should happen. Here is a look at both sides of the coin based on the many arguments I have seen people making on the news and on the web;

How a raise would be beneficial

Most people in support of the raise are arguing that the raise will increase the buying power of the low-income citizens which in turn will be a positive boost to the economy. The president himself visited some few businesses including a Costco store where he said they pay their employees way above the minimum wage. The Costco store in turn gets motivated employees and also a very low turn over. I tend to agree that in some cases, if you put some more money in the pockets of the low-income people, they can increase the spending which would be a boost to the economy.In 2005, I worked as  a cafeteria attendant in college where I was being paid a little over $5/hr. The minimum wage at that time was around $5.15.

My next job was $9.50/hr and that was higher than the minimum wage and even though I was getting a few cents raise every year, the minimum wage was creeping up much faster. One thing I can say is it is pretty difficult to survive on $9.50/hr especially where I live. Apartments are super expensive in comparison to that kind of pay and  once you add the rest of the bills, you cannot really save anything.The solution? Getting a second job which I held until I went back to school full time.

Opposed to the raise

People opposed to the raise argue that a raise would affect the economy negatively. They claim that this would force many businesses to cut hours and lay off some employees in order to reduce the additional cost in their budget. The raise would make hiring employees an expensive affair and so many businesses will find ways to compensate leaving many Americans out of work.

Unfortunately, if this is the economic truth of what would happen, many people struggling at the bottom wouldn’t look at it that way. They already got tired of living paycheck to paycheck  trying to make ends meet.How can they decline an offer to add $2 in their wage? It wouldn’t be about the big picture of the economy. It would be about the problems at hand and surely the $2 would lighten the load. That probably explains the overwhelming support for the raise.

Some states already raised their minimum wage in January. Are others going to follow? Are there any states who will match the federal suggested limit of $10.10? We will just wait and see how it plays out.

Let me hear your opinion. Do you support the minimum wage increase?

8 Responses to The fight to increase the minimum wage

  1. I have mixed feelings about it. I mainly worry that it will raise pay across the board in result in higher prices for everything. Of course, there are benefits as well.
    Holly@ClubThrifty recently posted…Embarrassing Ways to Save MoneyMy Profile

  2. I don’t think raising the minimum wage would be beneficial to the people it’s supposed to help, namely those who make minimum wage. The reason why is actually something you didn’t mention: investment in technology instead of investment in labor. I write about outsourcing on Thursday, but even middle-class jobs are being moved overseas because there is too much money to be saved. An accountant in India (a Senior Accountant, at that) makes $4,000 USD a year (converted from India’s currency). That’s it. If the minimum wage keeps raising companies will look into utilizing technology that long-term costs less than having minimum wage/low wage workers. It’s already been happening but the faster (and higher) we raise the minimum wage, the faster this sort of investment will speed up.
    DC @ Young Adult Money recently posted…Three things to consider when shopping for your next vehicleMy Profile

  3. demaish says:

    I totally missed that DC. I agree there is risk of more jobs being outsourced and also companies might invest on technology. I remember when my local Walmart installed the self check out machines, I wondered what happened to the cashiers.

  4. I can understand a slight increase in the minimum wage but many fast food workers are looking for a $15 minimum wage…that’s just not economically feasible in my opinion. The costs of the happy meal will no doubt have to be raised! And I agree about technology…even the parking garage cashiers have been taken over by machines.
    Andrew@LivingRichCheaply recently posted…Are You (Financially) Better Off Than Your Parents?My Profile

  5. Raising income can also be mean raising in expenses and lifestyle,then the velocity of liquidity in cash flows nicely in the economy. That’s the good side for increasing the wages of employees.

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