Will You Be Losing Your Job?

Jennifer Cortez
            Sometimes what you wanted is not always what you expected. If you want minimum wage to increase to $15 an hour, think again. An increase in minimum wage would theoretically benefit a working person’s income, but there are other factors that need to be taken into consideration before a nationwide decision is made. In today’s post, we will be discussing the negative effects of increasing minimum wage on employment opportunities.

            In the article "Negative Effects of Minimum Wage," Chris Edwards brings up two important reasons as to why increasing the minimum wage to $15 would not benefit our country. Edwards’ first point states “minimum wages reduce the work available for low-skill workers.” He supports his reasoning by asserting that employers will shift from manual labor to mechanical labor. An example of this would be a store having self check outs instead of cashiers because they are cheaper to maintain financially. This will then lead to a decrease in hours and possibly lose of occupation. Ultimately, the minimum wage increase will result “in a rise in poverty among these households.” Based on statistics, minimum wage increase cut employment opportunities for low-skilled workers. It is estimated that for every 10% increase in the minimum wage, employment for low-skilled workers is reduced by 1 to 3 percent. Majority of the states across the country have their minimum wage set at $7.25 an hour. If increased to $15 an hour, that would be about a 106% increase to their minimum meaning a multitude of jobs for low-skilled workers would be lost nationwide. By incrementing the minimum wage, we should be helping them financially not hurting them.

InsideGov | Graphiq

            Edwards’ second point states, “minimum wages do not alleviate poverty.” He supports his reasoning with the use of Census data. Surprisingly, it was found that majority of workers who earn between $7.25 and $10.10 per hour live in non-poor households. Out of all the workers who would be affected by the minimum wage increase, only 13% of those workers live in a poor household. Edwards also identified that “nearly two-thirds [of minimum wage employees] live in households with incomes over twice the poverty live, and over 40 percent live in households with incomes over three times the poverty line.” Although a minimum wage raise would financially benefit poor households, a not so drastic increase would be needed since majority of minimum wage workers live in non-poor households.

            I agree with both of Edwards’ reasons as to why minimum wage should not be increased to $15 an hour. It is logical that companies will begin to use mechanical labor instead of manual labor if minimum wage is increased. A machine will not ask for $15 an hour, but a person will. On top of that, other beneficiaries come into play that are necessary for an employee that a machine does not require. If mechanical labor is not installed and a company is required to pay their employees $15 an hour, they will either need to reduce employee hours or lose a few workers in order to be able to pay their current staff.  If neither route is taken, then prices will begin to increase in order to pay their employees and still make some profit. This is important especially to small businesses who do not have money laying around like big companies do to pay their workers. On top of this, there will be less level-entry jobs for those first job seekers, specifically teenagers, who have no work experience. Since jobs will be required to pay their employees more, they are most likely going to go for the person who knows what they are doing so they do not need to spend time training them. This will then make it difficult for them to find a job leaving them unemployed. As for the second reason, if majority of the minimum wage workers are living in a non-poor household, then why is a such extreme minimum wage increase needed? People assume increasing it so high will lift families straight out of poverty, but they do not see those who will fall deeper into poverty when they lose their jobs. In the end, it depends on the person and their experience on whether they will keep their occupation or not.
           Overall, I believe raising the minimum wage will not benefit poverty or our country. Even though it is a proposed idea, realistically, it will only hurt us. We want to move forward as a country, not take two steps back. As Edwards asserts, “such mandated increases do more harm than good, and they hurt the exact groups of people that policymakers say that they want to help.” Instead of helping, we are just creating an even bigger problem that can be avoided by keeping minimum wage the same.

Here is a visual summarizing the points covered in the entry above.
Works Cited

Boudreaux, Don. "Economics: Is Raising Minimum Wage A Bad Idea? - Learn Liberty," Youtube,            uploaded by Learn Liberty, 14 January 2016, https://www.youtube.com/watch?v=9aCpaON5NyE.
Edwards, Chris. "Negative Effects of Minimum Wage." Cato Institute, 8 Apr. 2016. Web. Accessed            28 Oct. 2016.