Minimum Wage Debate

Minimum wage has always been a controversial issue among policy makers and economists in the United States. Recently, the topic has become an increasingly hot debate whether it should be raised to help the minimum wage earners in America to make ends meet. The Seattle City Council has voted to gradually raise the minimum wage to a nation’s highest at $15 per hour starting from January 1, 2015(www.usatoday.com). While the state of Washington already has the highest minimum wage among other states at $9.32/hour, and the average inflation rate in the United States in the last five years was 11%(www.bls.gov), it is very hard to comprehend why such move was taken by the Seattle City Council to raise the minimum wage by more than 63%. It is believed

Some argue that the previous minimum wage was too low that affected parents had to work multiple jobs, day and night to raise their families. While these pro minimum wage supporters’ argument may be true, it need to be noted that according to a newly published research by the Bureau of Labor Statistics, most of the people who are affected by the minimum wage are teenagers(50.4%). They are the workers that we normally see working at low paying companies like McDonalds, Walmart and other small grocery stores or restaurants. These low paying companies need unskilled and inexperienced workers to do simple tasks, so they hire teenagers who have recently just finished high school or currently studying in college. These low paying companies do hire adults, but usually these adults work as supervisors or managers who will not be affected directly by the minimum wage. While it may be true that some of the parents in Seattle are being paid with minimum wage, they represent a minority and usually the ones who are without any college degree. Thus, the fact that the new minimum wage is introduced to help families to live out of poverty is not accurate at this time. The new minimum wage is actually very high that it would attract many college kids to concentrate more on finding minimum wage jobs and less on the activity that they are

A lot of companies nowadays provide fringe benefits to their employees to improve employees’ motivation and attract quality future workers. For example, Walmart provides employee discount, holiday vacation, and health insurance while Starbucks offers all those benefits and 401k plan as well (careers.walmart.com; starbucks.com/careers.) Recently however, a fellow at the Adam Smith Institute in London, Tim Worstall wrote an article on the Forbes website stating that there are a few workers at a SeaTac hotel in Seattle who already expressed their unhappiness because they have lost many of their employee perks after the new minimum wage is implemented by the hotel company. Now, its employees do not receive any free food when they are on duty like they used to before the new minimum wage. Because of this, it can be justified that the 63% increase in the minimum wage in Seattle has just been too much, where companies could not afford to provide any kind of benefits for their employees and consequently, may reduce the workers’ motivation. It might in a way, help the minimum wage earners in the city by increasing the amount of money they get paid every month, but with a