During the State of the Union speech, Obama had said many thing he wanted to improve in the nation. One of them is to raise the minimum wage from $7/hour to up to $10/hour. For those who don't know, Minimum wage is the minimum amount of money that the employer must pay the worker for an hour. I will give you the pros and cons for raising the minimum wage. Statements like these comes from newspapers and my Economic Teacher Mr. Schaefer.
-Pro-
- The minimum wage today aren't enough to support a family just below the poverty line, but raising it will able to raises the standard of living for impoverished workers.
- May encourage more people, young and old, to apply for more jobs in return help improve the economy, and able to reduce the unemployment rate.
- By improving the economy with higher pay means people are willing to buy more item like food, clothes, candy, toys, games, etc. Also more products that are bought more worker are doing their jobs and given promotion to help improve the line and so on. It consent cycle of improvement.
- Store who are already are raising their minimum wage are getting more improvement in the employee and employer relationship and morale. For example Gap raised the minimum wage to complement their worker and be able to steal other skilled worker from their competition. Much like predatory pricing on opposite day.
- Higher wages also benefit businesses by boosting employee productivity, retention and customer satisfaction, and reducing the high costs of employee turnover.
-Cons-
- If raising the minimum wage means stores, companies, and small businesses have to lay off some worker with a fixed compensation budget to be able to make additional money in the workers' paycheck.
- More adult would be working part-time not full-time which employers might hire fewer workers in the entry level jobs (part-time aka summer job) needed to begin a career. First-time workers like teenagers face the biggest risk of being priced out of the job market by a minimum wage hike. They aren’t worth much to an employer when they start working. They don’t have the skills. According to David Neumark and J.M. Salas, University of California economists, and William Wascher of the Federal Reserve Board, “minimum wages tend to reduce employment among teenagers.”
- For small companies, already stressed owner/operators might take on more responsibility.
- Wages for higher paid workers might be suppressed, and salary increases might be lower for those not impacted by a higher minimum wage.
- With Gap increase in their minimum wage, it is good for their business, it promotes employee loyalty and it will reduce employee turnover, but it’s not enough. The biggest issue facing retail workers nowadays is being able to work enough hours to earn a decent living. (Continuously changing part-time hours.)
There is no finally decision on the Minimum Wage debate for as long as Republicans and Democrats are still arguing on the Senate floor. Gap has the clearly has the advantage in the job market today because it is the only store in the nation that has rose it minimum wage and being able to steal other store's competition. Also be an example to help more along the Minimum Wage bill, and seeing how will it work out in the real world. But there is a really simple solution "Hire full-time workers in the job market!"
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