WAGES: The economy is not stable enough for an increase in minimum wage.
By Kate Doak, Staff Writer
Every year it gets harder and harder for families to live off of the minimum wage income of one or more household members. The economy took a huge nosedive years ago and is still faltering. True, the economy has gotten better and unemployment has gone down, but it has yet to make a full recovery. While the hard-working people in this country deserve more than six, seven or eight dollars an hour to take care of themselves and their families, an increase is only going to unravel the recent progress made.
The current federal minimum wage is $7.25 per hour, with Washington’s minimum wage the highest in the country at $9.19 per hour as of earlier this year, and California not too far behind at $8.00 per hour. Cities in California have some of the highest minimum wages in the country already. For example, San Francisco has a minimum wage of $10.55 per hour as of January 2013, the highest overall in the entire country. Most other states and cities, however, have a minimum wage under eight dollars, with tipped employees sometimes making as little as $2.13 per hour with the expectation that their wages plus their tips will equal minimum wage. In 2012, 3.6 million of all hourly paid workers made either exactly or, sadly, less than the federal minimum wage. For many people, from recent high school graduates to grown adults with families of their own, living off of minimum wage is a struggle with half, if not more, of their pay going to rent alone, not counting other bills (such as electric, water, heating and phone bills) and alternate expenses (groceries, home maintenance, clothing, ect.). Living day to day, paycheck to paycheck, is not an exaggeration. So, yes, the minimum wage needs to be increased. Eventually.
The reason it should not go up now is because the economy is not ready. While the economy has made some improvements, a jump in the minimum wage would just undo them. There are several reasons why: 1) If the minimum wage is increased, then those who now make over minimum wage will want an increase in their wages, as well. So the difference between minimum wage and any higher wage is just going to rebalance. 2) The general pattern of economics shows that when wages rise, prices rise. Prices on both consumption goods and production goods will rise because businesses will have to pay their employees more and then people who were struggling with living off of minimum wage will have just as hard of a time because prices and wages will level out. 3) Finally, when wages go up, employment goes down and production decreases, raising prices even further.
So, the main question here is, is it better to have 2,000 jobs in which the wages don’t permit workers to maintain a reasonable existence, or 1,000 with which the workers and their families can live comfortably? It’s a dangerous and sensitive issue that needs to be handled with care so that as many people as possible can benefit.