Should the Government Raise Minimum Wage?

The federal minimum wage has been stagnant at $7.25 per hour since 2009. The bill to raise the minimum wage from $5.15 an hour to $7.25 an hour was passed in May 2007, making it over thirteen years— the longest gap in history— since Congress has considered raising the federal minimum wage despite overwhelming popularity for them to do so. 

With the passage of the Fair Labor Standards Act in 1938, a minimum wage of $0.25 was established. The intention of the minimum wage was to raise the standard of living and to protect the health and well-being of workers, as well as to stimulate the economy after the Great Depression. Since then, the minimum wage has been raised 22 times.

Some who oppose the increase of the current minimum wage will argue that small businesses will have to lay off workers because they cannot afford the increase, or that it would increase the consumer cost of goods. History has not yielded these outcomes.

Minimum wage varies by state, with some states and some cities increasing the minimum wage where they see fit. Most notably, in 2015, Seattle, Washington passed a bill that would gradually raise the minimum wage in the city to $15 per hour for all employers by 2021. This is seen as one of the most prevalent experiments in a dramatic increase in the minimum wage, and has produced mixed results. Overall, while it cannot be tied directly to the minimum wage increase, the city’s economy has continued to thrive despite, or possibly because of, the wage hike. Businesses did have to make adjustments like cutting hours for employees, but it overall resulted in a net gain for the employees who could work less hours and earn a bit more than they had previously, which increases the overall standard of living. 

However, an increased minimum wage does not solve all problems. $7.25 minimum wage is not enough money to support anyone, especially in a highly expensive city like Seattle, but neither is a $15 minimum wage. This means that a city with costs that are already so high will be able to better adjust to a higher minimum wage than a poorer community. What works in Seattle might not work elsewhere.

Generally speaking, an increase in minimum wage is a much needed development. Minimum wage jobs, often argued to be “entry-level” jobs that are not intended to support a family are often the jobs that are doing just that. This means that these families rely on government assistance or on students to work a job in order to supplement income. An increase in minimum wage would alleviate both issues and encourage kids to stay in school.

Although many fear that an increase in minimum wage will lead to price increases for consumers, this is often not the case. However, if this does occur, usually it is not as much as expected and is often short-lived. In fact, it is more likely that the companies will benefit in the long run with employees feeling more valued and the general community potentially having more money to spend at vendors.

A model like Seattle’s might not work everywhere. But a minimum wage of $7.25 is not a living wage anywhere in this country. The federal government should complete its overdue responsibility and raise the minimum wage to at least $8 an hour, if not more, and cities and states can raise it more according to costs of living and other factors within those communities. 

Sources:

https://www.law.cornell.edu/wex/minimum_wage

https://www.history.com/news/minimum-wage-america-timeline

https://grow.acorns.com/how-seattles-minimum-wage-has-changed-the-city/

https://www.nea.org/advocating-for-change/new-from-nea/why-students-drop-out-economic-pressures-make-leaving-school

https://www.upjohn.org/research-highlights/does-increasing-minimum-wage-lead-higher-prices