By: Isaac Lund
The minimum wage in the US was introduced under President Franklin during the great depression. At the time of its creation, it was 25 cents, but today, Saint Paul’s is $12.50.
1.8 million workers, or 2.3% of the US’s workforce, makes less than the federal nationwide minimum, according to the Bureau of Labor Statistics. Should these minimums be increased?
Proponents of a higher minimum wage say it would increase economic activity and spur job growth. The Economic Policy Institute stated that raising the federal minimum wage by $2.85 would inject 22.1 billion dollars in the economy over a 3 year span, while simultaneously creating 85,000 new jobs.
Also, raising the minimum wage may reduce poverty: the current federal minimum wage is 8% below the national poverty level for single-parent households.
The minimum wage is also not indexed for inflation, so even as consumer prices rise, salaries for the poor do not necessarily increase in kind.
Increasing the minimum wage has also been shown to reduce income, gender, and race inequality. A Human Impact Partners study also showed that such an increase would reduce premature deaths by giving a wider range of people enough to eat.
Opponents of raising the minimum wage argue that raising minimum wage would increase unemployment levels. This would happen because companies would be forced to lay off some employees to stay afloat with the new minimum, and would also likely have to lower hiring levels. Many companies in their entirety may be forced to close.
Of course, consumer goods and housing prices would also increase sequentially.
Finally, many predict that more companies would outsource to countries with lower wages, like Southeast Asia, compacting on to an already-terrible issue.
Both proponents and opponents of this issue have valid points, and several of both sides’ predictions would likely come to pass if the minimum wage was increased. I personally believe an increase would be prudent, but maybe a small one at first, just to see what it brings.