Questioning a $15 Minimum Wage

http://www.nytimes.com/2015/07/27/business/economy/scale-of-minimum-wage-rise-has-experts-guessing-at-effect.html?ref=topics

       The issue expressed in this New York Times article is that the promise of a new fifteen dollar minimum wage might not be as good of an idea as it sounds. In theory, it is golden. A living wage for all! Down with the wage gap between the rich and the poor! Equality! But, it's not that simple. And even within party lines, there is some disagreement. The main issue is how little we know.

       There has not been a study done that could give us any real indication of what lifting the minimum wage nationwide to fifteen dollars would do. Even proponents of this change have expressed that there is a certain amount that we just can't know unless we try. The most relevant studies for this case indicate that a small amount of increase on the minimum wage in a controlled area is beneficial without a whole lot of people losing their jobs.

       Fear related to unemployment comes from the hypothetical that if the minimum wage increases, and companies have to spend more money on labor, that they will cut these costs by getting rid of employees so that the amount they spend on labor stays the same, and they will not have to change any other part of how they operate. Job loss because of an increased minimum wage has the potential to harm the very people the change would be intended to help. However, at this point, there is no data to support this anxiety that unemployment rates (which are tentatively rising) would skyrocket if this change were made. We don't have much proof either way.

       Even among Democrats, there is some disagreement about what the direct course about raising the minimum wage should be. There is no dispute about whether or not it needs to be raised, it is the amount that is in question. Bernie Sanders stands in favor of a nationwide fifteen dollar minimum wage, while Hillary Clinton argues that it should not be the same across the board, but that it should have some flexibility from location to location.

       On this issue, I agree more with Clinton. A dollar is not worth the same in every state. Prices vary and so should wage. Additionally, the current minimum wage in several Southern states, including Texas, is currently $7.25. Almost doubling the minimum wage is more likely to have an undesirable and unintended effect.

       In companies where cost and labor could be offset by raising prices, it's not as big of a deal. However, for smaller companies, job loss is a very real threat. We can help combat that threat by not raising all minimum wages nationwide to fifteen dollars drastically. It would be terrible if a plan created to help the working class ended up putting individually owned companies into debt, and set the unemployment rate back to where it was a couple years ago.