Raising minimum wage not the solution

The minimum wage has been a point of contention for years. The current national minimum wage, $7.25, and Nebraska’s minimum, $9.00, have both been argued for being too low, too low for someone to support themselves off of it. However, raising the minimum wage isn’t a win-win situation. Shifting to a $15 minimum wage would only negatively affect business owners.  

A skeptic only needs to look at how New York employment has changed over the last couple years to see that a higher minimum wage isn’t ideal. Since implementing a minimum wage of $11.10, “full-service restaurants recorded a 1.6 percent job loss,” according to the New York City Hospitality Alliance. New York City’s independent budget office put the total job loss in 2018 at 3.4 percent. Thomas Grech, president of the Queens Chamber of Commerce, blames the new wage for the drop in small businesses, saying employers are, “cutting their staff. They’re cutting their hours. They’re shutting down.” New York plans on raising the minimum wage each year until it reaches $15. 

If New York isn’t a good enough example, take a look at California, where the minimum wage is $12. According to Forbes, “California manufacturing has started to lose jobs and, if the trend continues, it will see its first loss in employment in nine years. By comparison, the U.S. has added 193,000 manufacturing jobs through July 2018.”  

The most common reason for raising the minimum wage is to keep up with the cost of living. However, California is a big state, and the cost of living in LA is different from the cost of living in Ojai, California. By raising the whole state’s minimum wage to keep up with the cost of living in the most populous cities, California is unfairly hitting rural towns with intense labor costs.  

Not enough evidence? In Seattle, a $12 minimum wage is causing employers to reduce hours, leading to a net earning loss of $125 a month, according to the Washington Post. By raising wage, Seattle is decreasing the amount of money its workers have. Talk about irony. 

A raised minimum wage sounds great if one only thinks from the perspective of an impoverished worker. But one can’t ignore the effects it would have on business owners. Yes, Jeff Bezos can afford to pay all Amazon workers $15 an hour from his own pocket no problem, but not everyone is Jeff Bezos. Small businesses are often already hiring just as many employees as they can pay minimum wage. If the wage increases, some of those employees are going to be fired.  

Some would say the smarter to raise the minimum wage is slowly over time, but that’s what’s happening in New York. The wage isn’t even at $15 yet, and the state’s already suffering.  

One possible solution would be to keep the current minimum wage, but raise it depending on the profits of the company. For example, Amazon workers would be paid more because Amazon makes billions of dollars. Meanwhile, Scout employees would be paid minimum wage because the owners likely don’t make enough profit to afford to pay their employees any more money. This theory, however, comes with the possibility that people would leave their jobs at smaller businesses to work for more money with a higher wage, leading to small businesses closing anyway. 

The minimum wage is more nuanced than people think it is, and there is no easy solution. Yes, employees need to be able to live, but raising the minimum wage may put more people out of work. And that’s just going backwards.