One of the most controversial topics talked about today in our society is the minimum wage. Currently, the federal minimum wage is set at $7.25 per hour, but with increases in the cost of living over the years, some believe the minimum wage should be increased to $15.00 per hour.
The article, “How much will minimum wage hike hurt restaurants?” shares insights on the burdens that would fall on restaurants if the minimum wage was increased to $15. Matt Haller, a spokesman for the International Franchise Association states, “Increases in the minimum wage will result in fewer jobs being created, higher prices for consumers and fewer opportunities for people to become small business owners as franchisees”. Moody’s Investors Service reports that an increase in the minimum wage will not only damage profits for restaurants, but will also damage profits of casual dining chain restaurants, i.e., Applebee’s, TGI Fridays, etc.
Hiking the minimum wage to $15 an hour is an opportunity cost because resources that might otherwise go to some other business purpose, including other business development opportunities, will go instead to employees.
Currently, only a handful of cities have increased their minimum wage to $15/hour. Los Angeles plans to have the minimum wage steadily increase to $15 an hour, and Seattle last year switched their minimum wage to $15 an hour.
In class, we recently covered a chapter on inflation. According to www.dictionary.com, inflation means: the substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency. The Consumer Price Index is considered the cost of living. The decrease or increase in the Consumer Price Index from year to year determines the inflation rate.
Some people argue that with inflation rising in the economy, the minimum wage does not support a healthy lifestyle, and $15 an hour would be a sustainable wage in our country today.
My own opinion does not support increasing the minimum wage because I don’t think it would be healthy for our society for three reasons. First, people with lower skill levels would earn a wage much closer to the level of the higher skilled fellow workers. This fact could demoralize the higher skill level workers which would hurt productivity. Second, $15 an hour will be very expensive for small businesses and would hurt their profitability. Third, I believe it would also hurt employment in the community because it cost so much more to employers.
Regarding the first point, I think that if a low skill worker (non-college graduates) receives the same income as a high skill worker (college graduate), it would have an effect of de-motivating the high skill worker. If the high skill worker is getting paid the same amount, it could cause a shift in the high skill workers productivity because he/she realizes that the low skill worker gets paid just as much.
Regarding the second point, an increase in the minimum wage would also hurt small businesses. Small businesses would have to increase their own prices to cover the difference of paying their employees a higher wage, and also to try to maintain profitably.
Lastly, I think with $15 an hour it would be very expensive for employers to hire other employees. Making it harder for members of the community to keep or acquire a job.
Overall, I oppose the increase in the federal minimum wage because it wouldn’t be beneficial for the society. I think keeping the minimum wage how it is should be an incentive for low income workers to: increase productivity and earn promotions in their places of work or to enroll in higher education to become more skillful.
The article, “How much will minimum wage hike hurt restaurants?” shares insights on the burdens that would fall on restaurants if the minimum wage was increased to $15. Matt Haller, a spokesman for the International Franchise Association states, “Increases in the minimum wage will result in fewer jobs being created, higher prices for consumers and fewer opportunities for people to become small business owners as franchisees”. Moody’s Investors Service reports that an increase in the minimum wage will not only damage profits for restaurants, but will also damage profits of casual dining chain restaurants, i.e., Applebee’s, TGI Fridays, etc.
Hiking the minimum wage to $15 an hour is an opportunity cost because resources that might otherwise go to some other business purpose, including other business development opportunities, will go instead to employees.
Currently, only a handful of cities have increased their minimum wage to $15/hour. Los Angeles plans to have the minimum wage steadily increase to $15 an hour, and Seattle last year switched their minimum wage to $15 an hour.
In class, we recently covered a chapter on inflation. According to www.dictionary.com, inflation means: the substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency. The Consumer Price Index is considered the cost of living. The decrease or increase in the Consumer Price Index from year to year determines the inflation rate.
Some people argue that with inflation rising in the economy, the minimum wage does not support a healthy lifestyle, and $15 an hour would be a sustainable wage in our country today.
My own opinion does not support increasing the minimum wage because I don’t think it would be healthy for our society for three reasons. First, people with lower skill levels would earn a wage much closer to the level of the higher skilled fellow workers. This fact could demoralize the higher skill level workers which would hurt productivity. Second, $15 an hour will be very expensive for small businesses and would hurt their profitability. Third, I believe it would also hurt employment in the community because it cost so much more to employers.
Regarding the first point, I think that if a low skill worker (non-college graduates) receives the same income as a high skill worker (college graduate), it would have an effect of de-motivating the high skill worker. If the high skill worker is getting paid the same amount, it could cause a shift in the high skill workers productivity because he/she realizes that the low skill worker gets paid just as much.
Regarding the second point, an increase in the minimum wage would also hurt small businesses. Small businesses would have to increase their own prices to cover the difference of paying their employees a higher wage, and also to try to maintain profitably.
Lastly, I think with $15 an hour it would be very expensive for employers to hire other employees. Making it harder for members of the community to keep or acquire a job.
Overall, I oppose the increase in the federal minimum wage because it wouldn’t be beneficial for the society. I think keeping the minimum wage how it is should be an incentive for low income workers to: increase productivity and earn promotions in their places of work or to enroll in higher education to become more skillful.