A popular and polarizing topic that you likely have heard about if you pay attention to politics is the debate on raising the national minimum wage to one that could be considered a living wage. We have already seen some of our nation's biggest cities implement their own laws to raise their minimum wage to numbers as high as $15/hour. Watching these cities, like Chicago and Seattle, has given the rest of us the opportunity to sit back and watch what happens.
A recent article by the Washington Post gave us some insight into what Seattle has found so far. There were 2 observations made in the article:
There is some buzz around this article, because it seems to support the conservative position that said that this type of thing would happen as the decision to implement the higher wage was being considered. However, as there are many supporters of this argument, there are an equal amount of people who disagree. The argument against the findings in this study that was published in the Washington Post are that:
Did our teenagers suddenly grow up and acquire responsibilities that suggest that they live on their own?
Let me start by saying that I started working when I was 15 years old. I must also say that I personally have never had a minimum wage job. My part time work as a younger person consisted of working at a flea market, working in a grocery store, and working at a nursing home. I will use the grocery store job as an example. Many of us have worked in the grocery type of environment, and we all know that there are many positions in a store that start at minimum wage. I chose to pursue working in a department that paid a higher rate. The meat and seafood departments are where I landed. These particular departments paid a higher rate due to the nature of the work that they required. From day one I was disassembling and cleaning equipment like slicers, meat grinders, band saws, and dozens of sharp knives. I would steam shrimp and crabs for customers, and I would operate meat wrappers with moving parts and hot plates.
Each of the responsibilities in the meat and seafood departments required a level of carefulness that may go beyond the task of bagging groceries or pushing carts. As a result the pay was higher. This point brings me to another question.
Would there be any incentive for me to work in a position with more responsibility if I could make the same pay as a bagger?
That is how the minimum wage topic relates within one store, but changing minimum wage laws would have a broader impact on the overall job market. Jobs with more responsibility become less appealing when the pay gap becomes smaller, unless of course the job with more responsibility also receives an increase in pay.
So do we all get raises when the minimum wage goes up?
The short answer is, "No." We are not getting raises (at least in proportion to the percentage that the proposed minimum wage increase would be). Businesses operate on budgets, and wages are a big piece of any budget. Businesses are working to become more efficient, and in many part time scenarios labor hours are a big focus for saving money. Raising wages to such higher levels has the potential bust any budget.
So where does it stop?
The minimum wage was implemented in 1938, and the wage was $0.25/hour, equal to about $3.80/hour in today's value of money. A $15/hour minimum wage would mean that slowly over time the program has more than quadrupled in size. How much more of a burden can business bare? A better question may be, how can we force a business to not have a choice?